High-Net-Worth Investors Worried About Direction of U.S. Economy
Northern Trust Survey also finds uncertainty among affluent Americans about
their ability to meet financial goals
CHICAGO -- February 12, 2013
Two thirds of high-net-worth American households with five million or more in
investable assets believe the country is worse off now than it was in 2007,
according to survey findings by Northern Trust.
Respondents cite the rising deficit, ballooning national debt and stubborn
unemployment rate as the main reasons they’re worried about the nation’s
five-year outlook. Among high net worth investors, 29 percent attribute their
negative outlook to the Obama Administration, but roughly the same number
pointed to the President’s re-election as a reason for their positive outlook
on the future.
Although most respondents believe the country is worse off, wealthy business
owners showed a more positive outlook. Eighty percent said they planned to
recruit more workers or would keep staffing levels stable in the next 18 to 24
months; 22 percent anticipate making capital investments in upgrading
computers and other information technology within the same time period.
“The survey results mirror our clients’ divergent views around U.S. fiscal
policy,” said Katie Nixon, Northern Trust’s Chief Investment Officer for
Wealth Management. "In Northern Trust’s view, slow economic growth in the U.S.
combined with an accommodative monetary policy, lends support to investing in
risk assets such as equities."
Achieving Financial Goals
When describing the state of their own finances, close to three-quarters of
high-net-worth individuals expressed confidence that they will achieve their
financial goals, with only one in five less confident now than they were in
2007. Forty-one percent sited improved investment returns as the main reason
they feel better off today. High-net-worth investors were split on their
primary investment objectives, with 37 percent leaning towards growing wealth
and 23 percent focused on generating income. The remainder said their
paramount concern was capital preservation.
Just one quarter said they’re in a worse financial position now than in 2007.
Negative sentiment was slightly stronger among men, with 25 percent versus 20
percent of women saying their household family finances had worsened.
High-net-worth men were also less optimistic about the broader economy: 70
percent believe the country is worse off today compared to five years ago,
compared to 56 percent of women.
A different picture emerges for investors with an average of 500,000 dollars.
For this group, confidence has been shaken, with fewer than half expressing a
high level certainty they will achieve their financial goals. Just 60 percent
of affluent investors, who have $2.3 million on average, express a high level
Investing Amid Uncertainty
The need to align financial goals with investments emerged as an important
theme for high-net-worth respondents. A large majority (81 percent) said they
prioritize the achievement of their life goals when they do their financial
planning. Forty-one percent believe diversification of their investments is
the most important action they have taken to make sure their life goals are
met. Nearly one quarter said they had also increased their savings to achieve
their long-term goals.
“Our survey found that 63 percent of wealthy investors are willing to take a
calculated risk," said Ms. Nixon. “We know that risk and return are related,
and we believe in taking thoughtful risk for clients to enable them to
accomplish their financial goals. The success of this approach is no longer
measured solely as performance versus an industry benchmark, but is measured
against the achievement of client goals. Re-defining success, and building
portfolios aligned with goals allows clients to avoid some of the behavioral
pitfalls that plague investors."
More information is available on Northern Trust’s website at
Northern Trust’s nationwide survey of wealthy individuals seeks to highlight
important wealth management issues. The online interviews were conducted by
Phoenix Marketing International and NIA Enterprises between November 16 and
December 17, 2012. The data contained in this report came from 1,700 online
interviews and has a margin of error of +/- 2.4 percentage points at a 95
percent level of confidence.
Northern Trust is a premier wealth management firm that specializes in
goals-based financial advice. We offer clients insightful perspectives and
creative thinking, backed by innovative technology and a strong fiduciary
ethos. Northern Trust is ranked among the top 10 U.S. wealth managers with
$197.7 billion in assets under management as of December 31, 2012, and more
than 70 wealth management offices in the United States and abroad. The
Financial Times Group has named Northern Trust Best Private Bank in the USA
for four consecutive years. In 2012 Northern Trust was also was named Best
Private Bank globally for Innovation and Best Private Bank for Socially
About Northern Trust
Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of investment
management, asset and fund administration, banking solutions and fiduciary
services for corporations, institutions and affluent individuals worldwide.
Northern Trust, a financial holding company based in Chicago, has offices in
18 U.S. states and 16 international locations in North America, Europe, the
Middle East and the Asia-Pacific region. As of December 31, 2012, Northern
Trust had assets under custody of US$4.8 trillion, and assets under investment
management of US$758.9 billion. For more than 120 years, Northern Trust has
earned distinction as an industry leader in combining exceptional service and
expertise with innovative products and technology. For more information, visit
www.northerntrust.com or follow us on Twitter @NorthernTrust.
Photos/Multimedia Gallery Available:
Northern Trust Corporation
Bailey Madden, 312-557-1314
Amy Bickers, 312-444-3097
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