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Survey Offers Insights into New High Net Worth Individuals
Young and new rich want financial security

Calibre, the nation's third-largest multi-client family office and subsidiary of the Charlotte, North Carolina-based Wachovia Corporation, has released results of an online survey capturing a snapshot of a rarely studied population: young, professional and very wealthy.

This newly wealthy but under-served population has created great long-term business opportunities for High Net Worth (HNW) managers and advisors.

To target this emerging investor segment, look to the survey results for what is important to them. For example, the results revealed that younger and more recently wealthy individuals cited “achieving financial security” and “growing their wealth” as top concerns, versus “preserving wealth,” which is a top concern for wealthy investors historically.

Nearly 700 people responded, with male/female split being almost 50/50. Financial security was the single highest priority for both sexes.

The survey found:

• 85% of respondents have owned $25 million in investable assets for 10 years or less; 67% have had $25 million in investable assets for less than five years.
• 77% of respondents were under 60, and the largest segment of survey participants - about a third - are 35 to 44 years old.
• More than three quarters of those surveyed are married, and seven in 10 are married to their first and only spouse.
• Nearly three quarters have children - four in 10 of whom are still in the home.
• 42% are professionals.
• At least 20% have alternative investments, such as private equity, venture capital, REITs and/or hedge funds. 23% have no equity investments, while 30% have no bonds.

These individuals have not given as much attention to managing wealth and transferring it to the next generation, or selecting charities, as those who have been wealthy longer. They also are less concerned about being discreet with their wealth or about potential family conflict caused by wealth, while those who have had their wealth longer are more careful not to show it to outsiders.

48% of respondents attributed their wealth to "smart risk-taking." 78% attributed their wealth to "hard work."

Knowing what’s important to this emerging “young and newly wealthy” market — and tailoring investment products to meet their objectives — is the challenge for all HNW managers and advisors.

Sources: Calibre (www.calibre.com); Tristan Blythe