Recession-Weary Affluent Americans Hesitant to Invest Despite Improving Market
November 18 2009 - 7:00AM
PR Newswire (US)
- Nearly Half of Ultra-Wealthy Expect to Wait At Least One Year for
Economic Lift, PNC Survey Finds - PHILADELPHIA, Nov. 18
/PRNewswire-FirstCall/ -- The recession has left a large number of
America's wealthy cautious about re-investing in the stock market
and skeptical about a strong economic recovery, according to a
survey by PNC Wealth Management, a member of The PNC Financial
Services Group, Inc. (NYSE:PNC). Although more than half (51
percent), up from just 25 percent a year ago, are optimistic for
the prospects of the stock market over the next six months, only 6
percent characterize themselves as enthusiastic about investing,
while half (49 percent) describe themselves as either more
tentative or outright reluctant to invest, according to the sixth
annual Wealth and Values Investors' Outlook. The survey also
revealed that only one in five (20 percent) believe the economy is
showing signs of improvement, with 40 percent projecting that
progress is at least one year away. Also, many affluent Americans
have changed their investment behavior, as one third (34 percent)
say they are more conservative now, while 59 percent describe
themselves as balanced or "moderate risk" investors. "There is no
doubt that the last year has taken its toll on wealthy investors,"
said Thomas P. Melcher, executive vice president and managing
director of Hawthorn, the division of PNC Wealth Management that
serves clients with $20 million or more in investable assets.
"Unfortunately it often takes a severe crisis and a significant
loss of capital for investors to discover their true risk
tolerance." He added, "The survey results validate the value of an
integrated wealth management model -- one that combines estate,
financial and tax planning with investment management. Integrated
wealth management enables investors to define their needs rather
than their wants, which typically results in a less risky portfolio
than one that focuses on wants." Recession Impact Significant The
survey of 1,046 wealthy Americans, all of whom have at least
$500,000 in investable assets, also revealed the recession has had
a negative effect on their investments, but the impact varies by
how much money they have. Nearly seven in 10 (68 percent) of those
with $500,000 to $1 million have seen a negative effect, compared
to five out of 10 (48 percent) of those with $5 million or more in
investable assets. The Wealth and Values Survey by PNC, which is
among the nation's top 20 wealth management firms, also revealed
insights about the following issues: Views differ between the
overall affluent group and the ultra wealthy, defined in this
survey as those with more than $5 million in investable assets.
Stock market forecast: The ultra wealthy are somewhat less
optimistic about the performance of the stock market the next 6
months, with 41 percent very or somewhat optimistic compared to 51
percent among all wealthy. Anemic returns: While 68 percent of
those with $500,000 to $1 million in assets said the recession has
caused a negative effect on their investments, just 48 percent of
those with $5 million or more believe that to be the case. It's the
economy: The ultra wealthy are more pessimistic about economic
recovery: 52 percent (compared to 40 percent of the total affluent
sample) do not expect to see economic improvements until well into
2010. The PNC Financial Services Group, Inc. (http://www.pnc.com/)
is one of the nation's largest diversified financial services
organizations providing retail and business banking; residential
mortgage banking; specialized services for corporations and
government entities, including corporate banking, real estate
finance and asset-based lending; wealth management; asset
management and global fund services. Survey Methodology The Wealth
and Values Survey was commissioned by PNC to identify attitudes
about wealth among high-net-worth individuals, how it affects their
lives and their needs in managing wealth. The survey was conducted
online within the United States by Harris Interactive in September
2009 among a nationwide cross section of 1,046 adults (age 18 or
over) with annual incomes of $150,000 or above (if employed), at
least $500,000 of investable assets (unless retired) or at least $1
million of investable assets (if retired). Findings are significant
at the 95 percent confidence level with a margin of error of +/-
3.0 percent. The survey was designed and managed by HNW, Inc.
(http://www.hnw.com/), a leading provider of wealth marketing
software and solutions to financial services companies and
intermediaries seeking to capture and serve the high net worth
market. The survey was supported by Artemis Strategy Group
(http://www.artemissg.com/), a communications strategy research
firm specializing in brand positioning and policy issues. This
report has been prepared for general informational purposes only
and is not intended as specific advice or recommendations.
Information has been gathered from third party sources and has not
been independently verified or accepted by The PNC Financial
Services Group, Inc. PNC makes no representations or warranties as
to the accuracy or completeness of the information, assumptions,
analyses or conclusions presented in the report. PNC cannot be held
responsible for any errors or misrepresentations contained in the
report or in the information gathered from third party sources. Any
reliance upon the information provided in the report is solely and
exclusively at your own risk. CONTACT: Alan Aldinger (412) 768-3711
DATASOURCE: The PNC Financial Services Group, Inc. CONTACT: Alan
Aldinger of the PNC Financial Services Group, Inc.,
+1-412-768-3711, Web Site: http://www.pnc.com/
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