June 15 (Bloomberg) -- Rich investors are paralyzed because they are concerned markets may decline further, said Philippe Sednaoui, chief executive officer of Barclays Wealth in Switzerland.

More than two-thirds of 2,100 people surveyed worldwide said the risks of price fluctuations were still too high, even though almost 90 percent believe there were ways to make money in the current market, according to a report published today by the private banking unit of London-based Barclays Plc.

“The vast majority of clients recognize that by historical standards there are great opportunities out there,” Sednaoui said in an interview at his Geneva office. “But they have difficulty deciding whether a new storm will unleash, so aren’t willing to act.”

The world’s wealthy, defined as people with more than $1 million invested, probably saw their assets decline by at least one fifth last year, according to Scorpio Partnership Ltd., a London-based consulting firm specialized in wealth management. The Standard & Poor’s 500 Index has climbed 40 percent since early March, paring losses for the past 12 months to 29 percent.

The Barclays survey targeted people with 500,000 pounds ($830,000) TO 30 million pounds to invest and was conducted by the Economist Intelligence Unit between March and May.

“The length and the strength of the rally has been surprising,” Sednaoui said. “Eventually we’ll see a correction. The question is whether it’ll be more fundamental than technical.”

Psychometric Testing

Barclays Wealth asks clients to complete psychological tests to assess their risk appetite and reaction to large gains or losses to help guide investment advice. The bank already uses so-called psychometric testing in the U.K., Monaco and Switzerland, and plans to extend it to the U.S. and Middle East, said Greg Davies, head of behavioral finance at Barclays Wealth.

Barclays bought Lehman Brothers Holdings Inc.’s North American unit in September.

Total assets under administration at Barclays in Switzerland fell 14 percent to 14.9 billion Swiss francs ($13.8 billion) during 2008.

To contact the reporter on this story: Warren Giles in Geneva at wgiles@bloomberg.netCamilla Hall in Dubai at chall24@bloomberg.net

Last Updated: June 15, 2009 10:01 EDT