2015 WEALTH MANAGEMENT REPORT: U.S.

Transcription

1 2015 WEALTH MANAGEMENT REPORT: U.S.

2 GLOBALLY, NUMBER & WEALTH OF MILLIONAIRES IS PROJECTED TO GROW Over the past five years, millionaire wealth has grown by 9% annually By 2018, McKinsey projects there will be 18MM millionaires globally, controlling USD $76 trillion in personal financial assets (+49% vs. today, more than double the post crisis trough). As low interest rates continue (for now), and the market begins to show signs of volatility, effective, trusted information and advice is more important than ever. Source: McKinsey Banking Practice, Global Wealth Management Survey October

3 STUDY OBJECTIVES Understand affluent investor s attitudes towards money, investing, their financial advisers and financial brands globally Affluent investors & their assets Investors motivations and attitudes towards money, investing, their financial priorities and perceived barriers to reaching goals Type of investments/assets currently held and financial services used Affluent investors & their relationships to financial firms & financial advisers Number of financial firms used, number of years with them, frequency of communication with advisor, etc. Gap analysis of importance vs. performance of services/attributes Brand evaluation of private/wealth firms & online brokers Evaluation of financial firms on key metrics: Familiarity, Reputation, Usage Impact of marketing & advertising Sources used for learning more about financial services Impact of financial advertising 3

4 METHODOLOGY & KEY METRICS Biennial study conducted by WSJ. Insights for over 10 years, conducted globally for the first time in 2013 fielded globally. Due to change in methodology tracking from prior studies are not available. Moved to an online study for 2015 and fielded July 16 August 3, 2015 among WSJ Opinion Leaders (WSJ U.S. reader panel). Key Brand Metrics Measured: 1. Familiarity % Very/Somewhat Top 2 (out of 4) 2. Reputation % Excellent/Good Top 2 (out of 4) 3. Current Provider(s) % Currently Use 4

5 U.S. RESPONDENT PROFILES WSJ U.S. Readers Total # of respondents U.S. Total HH Investments $500K+ Conservative/ Maintain Assets Take Risks for Greater Rewards Use Pro Adviser Self- Directed Investor HH Investment $5MM+ 2, , M/F 89/11 86/14 92/8 88/12 91/9 91/9 Average: Age HH Investments $4.0MM $4.0MM $4.5MM $4.1MM $3.4MM $12.1MM Total HH Net Worth (Excludes primary residence) $5.7MM $5.4MM $6.4MM $6.0MM $4.5MM $16.0MM WSJ Readers=Read WSJ regularly (3-4 of 4 issues) or subscribe to print and/or digital WSJ properties 5

6 RESPONDENT PROFILE INVESTMENT ATTITUDES AND STYLES STRONGLY AGREE APPROXIMATELY ¼ ARE RISK-TAKERS & ¼ CONSERVATIVE INVESTORS ALMOST ALL USE PROFESSIONAL ADVICE, BUT CLOSE TO 1 IN 5 ARE COMPLETELY SELF-DIRECTED 25% 19% 46% 26% 81% 3% RISKS-TAKERS BOTH STATEMENTS CONSERVATIVE IN THE MIDDLE USE PRO ADVISER SELF-DIRECTED WSJ. Insights 2015 Global Wealth Management Study; HH Investments $500K+; U.S. n=2,701 Q8. Thinking about your financial portfolio, how much do you agree or disagree with the following statements? Base: Strongly Agree, "I am conservative in my investments, it's more important to maintain my assets value, I am willing to take calculated risks with my investments for potentially greater rewards Q12. Which of the following does your household currently use to help manage your investments/assets? 6

7 RESPONDENT PROFILE HH INVESTMENTS & NET WORTH HH INVESTMENTS HH NET WORTH 20% 19% 10% 29% 19% 61% 42% $500K - $999K $1MM - $4.9MM $5MM + < $2MM $2MM - $4.9MM $5MM - $9.9MM $10MM + WSJ. Insights 2015 Global Wealth Management Study; Bases HH Investments $500K+; U.S. n=2,701 Q30. What is the approximate total current market value (in U.S. dollars) of financial instruments/investments now held by you or other members of your household? Q31. What is your approximate total household net worth (in U.S. dollars)? 7

8 AFFLUENT INVESTORS: MONEY, INVESTMENTS

9 PRIMARILY MONEY MEANS SECURITY & FREEDOM But more than half agree it represents the opportunity to give back 90% 83% 58% 33% 14% 12% FINANCIAL SECURITY FREEDOM OPPTY TO GIVE BACK OPPTY TO SPEND ON LUXURIES STATUS POWER WSJ. Insights 2015 Global Wealth Management Study; Bases HH Investments $500K+; U.S. n=2,701 Q5. Money means different things to different people. Looking at the list below, please tell us what money means to you. 9

10 WIDE RANGE OF INVESTMENTS HELD On average own 6 asset classes; those willing to take on more risk average 7 % OWN U.S. TOTAL CONSERVATIVE RISK-TAKING Mutual funds (equity, bond, index, emerging market, etc.) Individual stocks Money market funds Exchange traded funds (ETFs) Real estate (excluding primary residence) Individual bonds Real estate investment trusts (REITs) Annuities (fixed or variable) Fine art/antiques/collectables Section 529 college savings plans Master limited partnership Alternative investments (venture capital, private placements/private equity funds) Futures/options (stock, currency, commodity, etc.) Hedge funds Exchange traded notes (ETNs) Bold numbers indicate statistical differences conservative vs. risk-taking WSJ. Insights 2015 Global Wealth Management Study; HH Investments $500K+; Base: Own any, excluding savings U.S. n=2,692, Conservative n=704 Risk-taking n=667 Q10. Which of the following types of investments and/or assets do you or your household currently hold? 10

11 WIDE RANGE OF INVESTMENTS HELD Those who use professional adviser own 6 asset classes; self-directed own 5 U.S. TOTAL % OWN SELF- DIRECTED PRO ADVISED Mutual funds (equity, bond, index, emerging market, etc.) Individual stocks Money market funds Exchange traded funds (ETFs) Real estate (excluding primary residence) Individual bonds Real estate investment trusts (REITs) Annuities (fixed or variable) Fine Art/Antiques/Collectables Section 529 College Savings Plans Master limited partnership Alternative investments (venture capital, private placements/private equity funds) Futures/options (stock, currency, commodity, etc.) Hedge funds Exchange traded notes (ETNs) Bold numbers indicate statistical differences Self-directed vs. Pro Advised WSJ. Insights 2015 Global Wealth Management Study; HH Investments $500K+; Base: Own any, excluding savings U.S. n=2,692, Self-directed n=7502 Professionally Advised n=2,190 Q10. Which of the following types of investments and/or assets do you or your household currently hold? 11

12 RETIREMENT PLANNING IS TOP PRIORITY Planning for family/life events is a close 2 nd VERY/SOMEWHAT IMPORTANT 15% 28% 45% 41% 81% 64% 45% 46% 32% 13% RETIREMENT PLANNING PLAN FOR FAMILY/ LIFE EVENTS MINIMIZING INCOME TAX WEALTH TRANSFER PHILANTHROPIC PLANNING VERY IMPORTANT SOMEWHAT IMPORTANT WSJ. Insights 2015 Global Wealth Management Study; HH Investments $500K+; U.S. n=2,701 Q6. How important are each of the following financial goals to you and your household? 12

13 GLOBAL ECONOMY IS PERCEIVED AS MAIN BARRIER TO REACHING FINANCIAL GOALS While planning for life events is important, it is not seen as a significant barrier to long term goals MAIN OBSTACLE TO REACHING FINANCIAL GOALS 11% 10% 14% 65% ECONOMIES (U.S., EUROPEAN, ASIAN) OVERSPENDING HEALTH OF FAMILY FAMILY OBLIGATIONS WSJ. Insights 2015 Global Wealth Management Study; HH Investments $500K+; U.S. n=2,701 Q7. What do you perceive as the main obstacle to reaching your financial goals? 13

14 ALMOST ALL THINK ABOUT/CHECK THEIR PORTFOLIO MONTHLY + Similar frequency for Self-directed & professionally advised TOTAL U.S. 3% 10% 4% 84% SEMI-ANNUALLY OR LESS OFTEN QUARTERLY EVERY OTHER MONTH MONTHLY + WSJ. Insights 2015 Global Wealth Management Study; HH Investments $500K+; Base: Among those who answered U.S. n=2,266 Q9. How often do you think about your personal investments/portfolio - e.g., checking the value of your investments? 14

15 RELATIONSHIP WITH FINANCIAL FIRMS & ADVISERS

16 A LITTLE LESS THAN HALF OF THEIR PORTFOLIO IS UNDER THE GUIDANCE OF A FINANCIAL PROFESSIONAL These affluent investors are an important communication target % OF PORTFOLIO MANAGED BY (AMONG THOSE WHO USE PRO ADVISER) 54% 46% PROFESSIONAL FINANCIAL ADVISER SELF-DIRECTED WSJ. Insights 2015 Global Wealth Management Study; HH Investments $500K+; U.S. n=2,196 Q13. Thinking about your total investment assets to date, what percentage of your overall investments are managed by...? 16

17 AMONG THOSE WHO WORK WITH PROFESSIONAL ADVISERS On average, work with 3 different advisers 65% 40% 37% 26% 23% 13% FINANCIAL CPA/ACCOUNTANT STOCKBROKER ATTORNEY ONLINE BROKER PRIVATE BANKER PLANNER/ADVISER WSJ. Insights 2015 Global Wealth Management Study; HH Investments $500K+; U.S. n=2,196 Q12. Which of the following does your household currently use to help manage your investments/assets? 17

18 MULTIPLE FINANCIAL SERVICES USED ESPECIALLY THOSE WITH INVESTMENTS OF $5MM+ TOTAL U.S. % HH INVESTMENTS $5MM+ Full Service/Online Broker (net) Full Service Broker Online Broker Private Banking/Wealth Management (net) Wealth Management Private Banking Tax Planning Estate Planning Retirement Planning Philanthropic/Charitable Planning 8 18 Private Equity/Private Placement 7 20 Real Estate Advisory/Investments 5 9 Socially/Environmentally Responsible Investments 2 2 WSJ. Insights 2015 Global Wealth Management Study; HH Investments $500K+; U.S. n=2,530 Base: HH Investments $5MM+ n=529 Q11. Which of the following financial services do you or your household currently use?

19 THEY HAVE INVESTMENTS WITH MULTIPLE FIRMS The relationship with their primary firm is a long-standing one 3 FIRMS IN WHICH THEY HAVE INVESTMENTS, ON AVERAGE 26% JUST ONE; 7% HAVE YEARS ON AVERAGE WITH PRIMARY FIRM 25% HAVE BEEN WITH THEIR PRIMARY FIRM FOR 25+ YEARS WSJ. Insights 2015 Global Wealth Management Study; HH Investments $500K+; U.S. n=2,701 Q15. How many financial firms do you currently have investments with? Q16. How long have you been working with your primary financial institution? - by primary, we mean the financial institution that holds the highest asset value. 19

20 ADVISER INITIATED COMMUNICATION COULD BE MORE FREQUENT On average, their adviser initiates communication 6x year; but over 80% think about/check their portfolio monthly 33% 30% 16% 11% 5% 6% MONTHLY + EVERY OTHER MONTH QUARTERLY SEMI-ANNUALLY ONCE A YEAR LESS OFTEN THAN 1X YEAR WSJ. Insights 2015 Global Wealth Management Study; HH Investments $500K+: U.S. n=2,196 Q20. How often does your primary financial adviser initiate communication with you? 20

21 LOYALTY IS SPLIT EVENLY BETWEEN ADVISER & FIRM IF MY FINANCIAL ADVISER LEFT HIS/HER FIRM, I WOULD 50% 50% MOVE FIRMS, TO STAY WITH MY ADVISER STAY WITH THE FIRM AND WORK WITH A NEW ADVISER WSJ. Insights 2015 Global Wealth Management Study; HH Investments $500K+; U.S. n=2,701 Q19. If your financial adviser left their firm for another, which of the following would be your response? 21

22 REASONS THEY WOULD LEAVE A FINANCIAL FIRM Customer service is virtually as important as returns, higher fees were also a strong write-in reason to leave MULTIPLE YEARS OF LOW RETURNS 53% ADVISER WASN'T PAYING ME ENOUGH ATTENTION 51% ADVISER MOVED FIRMS 34% CONSOLIDATING INTO FEWER FIRMS 21% LIFE-STAGE CHANGE (E.G. RELOCATION, DIVORCE, ETC.) 16% TRY NEW FIRM/ADVISER 12% LOW RETURNS THIS YEAR 9% WSJ. Insights 2015 Global Wealth Management Study; HH Investments $500K+; U.S. n=2,701 Q18. What would make you leave a financial institution with which you currently do business? 22

23 GAP ANALYSIS IMPORTANCE VS. PERFORMANCE Very Important vs. Excellent Performance Shaded area, performance lower than importance 100% % PERFORMANCE (TOP BOX: EXCELLENT) 90% 80% 70% 60% 50% Sells/recommends Info about wide range of products what 40% differentiates Online/mobile firm capabilities Provides 30% Access customized financial to innovative financial plan 20% instruments 10% Company's reputation Fees charged My FA knows me Quality of service Knowledge/ expertise of Adviser High ethical standards 0% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% % IMPORTANCE (TOP BOX: VERY IMPORTANT) WSJ. Insights 2015 Global Wealth Management Study; HH Investments $500K+; U.S. n=2,701 Q14. How important are the following when selecting a financial institution and/or adviser for your personal investments Q17. How would you rate your primary financial institution/company in the following areas? - by primary, we mean the one with the highest asset value. 23

24 IMPACT OF MARKETING AND ADVERTISING

25 THEY TRUST THE JOURNAL FOR FINANCIAL COMPANY NEWS 95% regularly read (three out of four issues) the print edition of The Wall Street Journal SOURCES RELIED ON FOR INFORMATION ABOUT FINANCIAL SERVICES COMPANIES THE WALL STREET JOURNAL FRANCHISE (WSJ PRINT + WSJDN) 98% TV PROGRAMS OTHER FINANCIAL NEWS (CNNMONEY.COM) INVESTMENT FIRMS LITERATURE OTHER NATIONAL NEWSPAPERS (FT, INYT) OTHER PERSONAL FINANCE PUBLICATIONS (EUROMONEY) BUSINESS MAGAZINES (FORBES, BLOOMBERG BUSINESSWEEK) VIDEO/AUDIO PODCASTS NEWSWEEKLIES (TIME) SOCIAL SITES (LINKEDIN, FACEBOOK, TWITTER) 20% 17% 16% 14% 6% 5% 4% 33% 33% WSJ. Insights 2015 Global Wealth Management Study; Base: HH Investments $500K+, U.S. n=2,701, 25

26 FINANCIAL ADS IN THE JOURNAL DRIVE ACTION Nearly three-quarters took some action upon seeing financial-related advertising in WSJ (72% ) ACTIONS TAKEN FROM FINANCIAL AD IN WSJ ANY ACTION (NET) 72% SAVED VISITED ADV. WEBSITE 52% 51% SHARED INFORMATION 43% CONTACTED FA MORE FAVORABLE OPINION ASKED FOR MORE INFO 34% 32% 37% CONTACTED ADV. 15% RECOMMENDED 6% WSJ. Insights 2015 Global Wealth Management Study; HH Investments $500K+; U.S. n=2,701, 26

27 THANK YOU.