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2018 Insights on
Wealth and Worth

Putting wealth into action

Middle-aged woman and senior woman discussing plans.

The 2018 U.S. Trust Insights on Wealth and Worth® study asked high-net-worth individuals about their approach to building wealth and the extent to which they are using it to achieve their goals and support the causes they care about most.

The study found that while wealth provides the freedom to do more, it also brings increased obligations, expectations and demands. Today, competing priorities are keeping the wealthy from clearly identifying the purpose of their wealth and taking deliberate steps to put a plan into action. However, those who work with an advisor are further along in reaching their goals.

It is often thought that financial success comes with a certain level of financial freedom: the freedom to pursue passions, to take risks, to give back and to make an even bigger impact. And while increased wealth does provide the ability to do more, it also comes with increased obligations and demands.

The 2018 U.S. Trust Insights on Wealth and Worth® asked nearly one thousand high-net-worth individuals about their approach to building wealth and the extent to which they are using it to realize their aspirations and goals. The results reveal that despite the many opportunities their wealth provides, less than half have defined a purpose for it or feel fully satisfied with what they are doing to help others.

Overall, less than half have put a plan into action. However, those who use an advisor with a more comprehensive approach are further along in achieving their goals.

For many people, their strategy reflects changing trends in investing — especially Millennials, who are less reliant on traditional stocks and bonds and instead are looking to grow their wealth by adding alternative strategies and assets. Another trend on the rise is that more individuals are using investments as a reflection of their personal values.

We also saw art lovers viewing their collections as more than just a passion. Many are now including their collections as part of their overall financial picture.

When it comes to business owners, a common strategy for many is investing in employees who add value to their company. However, it may be surprising to learn that only one-third have a formal succession plan in place, putting their employees at risk. Ultimately, there’s no one-size-fits-all approach. Identifying priorities, managing competing ones, and working with an advisor can provide the clarity needed to develop the right plan.

For more information about putting wealth into action, please visit our detailed findings report at USTrust.com/survey.

Important Information: Opinions and findings expressed herein reflect those of the 2018 U.S. Trust Insights on Wealth and Worth® survey, and may differ from those of U.S. Trust and Bank of America Corporation and its affiliates. The information presented in this video is for discussion purposes only and is not intended to serve as a recommendation or solicitation for the purchase or sale of any type of security. This video does not constitute investment advice and is issued without regard to specific investment objectives or the financial situation of any particular recipient.

Survey Methodology: The 2018 U.S. Trust survey of High Net Worth investors is based on a nationwide survey of 892 high-net-worth and ultra-high-net-worth adults across the U.S. A total of 892 HNW individuals with $3 million or more in investable assets, not including the value of their primary residence, completed the survey. U.S. Trust commissioned the independent research firm Phoenix Marketing International to administer the online survey, analyze the data and test for statistical relevance. The double-blind survey was fielded over a six-week period, beginning in January and completed in February 2018. Quotas were established by age, investable asset size and for business owners to ensure sufficient representation of groups of interest. The final sample was weighted to the true representation of HNW households by age, asset level and business ownership and are not representative of U.S. Trust clients. Asset information was self-reported by the respondent. Verification for respondent qualification occurred at the panel company, using algorithms in place to ensure consistency of information provided, and was confirmed with questions from the survey itself. All data have been tested for statistical significance at the 95 percent confidence level. Alternative investments are intended for qualified and suitable investors only. Alternative Investments such as derivatives, hedge funds, private equity funds, and funds of funds can result in higher return potential but also higher loss potential. Changes in economic conditions or other circumstances may adversely affect your investments. Before you invest in alternative investments, you should consider your overall financial situation, how much money you have to invest, your need for liquidity, and your tolerance for risk. Alternative investments are speculative and involve a high degree of risk.

Explore survey highlights:

Planning

Are high-net-worth individuals actively planning for how to use their wealth?

72% Proactively protecting & sustaining wealth; 49% have taken steps to use wealth as intended; 47% have identified a purpose for their wealth

 

Although the majority of respondents report taking practical steps to protect and sustain wealth, only about half have clearly defined a purpose for their wealth or taken deliberate steps to make the most of it.

 

Goals

Why are some wealthy individuals further along in achieving their goals?

Average progress made towards goals: 65% with wealth manager; 60% with broker or investment advisor; 51% with no advisor

 

Those who use an advisor — particularly an advisor with a more comprehensive approach — have made greater progress toward achieving their goals than those without an advisor.

 

Investing

How are Millennials investing to grow their wealth?

47% cash, 25% stocks in 2017; 21% cash, 46% stocks in 2018

 

Millennials have recently shifted a large amount of cash into stocks, and are gravitating toward more sophisticated investment approaches, including alternative strategies and nontraditional assets.

 

Impact investing

Who’s driving interest in impact investing?

46% Men, 64% Women, 87% Millennials, 65% Gen X, 48% Boomers, 39% Silent

 

The majority of Millennials, Gen X and women believe that a company’s track record in environmental, social and governance is an important consideration for investing. In fact, 37% of all high-net-worth investors are reviewing their portfolios for impact investments.

 

Art

How are younger collectors thinking differently about buying art?

“It’s a safe haven in volatile markets”: 32% Millennials, 16% All; “It’s an asset that can be leveraged to build wealth”: 33% Millennials, 16% All

 

Millennials are twice as likely as older generations to use art as part of their wealth-building strategy.

 

Business Owners

How are business owners prioritizing employee-related spending?

Increase: Wages and compensation, 59%; Employment levels, 53%; Funding for employee

 

Business owners are acutely aware of the vital role their businesses play in the lives of employees and are taking steps to demonstrate their commitment to workers.

 

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