June 2016, Gurgaon
• High net worth (HNW) investors represent 30% of all population out of which only 15% are millennial in the US.
• Almost 89% of the HNW investors have developed their own wealth rather than inheriting it from their ancestors while 80% use online services for their daily payments.
Ken Research announced latest publication on, “Wealth in the US: HNW Investors; Understanding HNW investors and wealth management strategies” which provides detailed analysis of wealth management in the US. This report focuses more on the investing inclination and portfolio allocation of the US HNW investors. It puts forward how the new and existing players can use this information on dynamics of the investment preferences in the US to gain an edge in the market. Additionally, it covers what key features to be included in investment options, keeping in mind all the changes taking places in the US wealth segment.
The US is home to a diverse and sizable HNW segment and a handful of client investment portfolios are appropriated into bond investments and more pressure is placed on better returns from alternative investments. Most of the US HNW individuals have gained wealth either by means of family business owner or as a first-generation entrepreneur which has led to increased demand for personalized wealth management services. The basic reason why the US HNW clients opt to have their wealth professionally managed is to gain access to sophisticated investment products while some clients feel that their portfolio is too complicate to handle themselves. There is more preference for discretionary mandates over advisory asset management among the HNW clients. High net worth individual (HNWI) is a part of financial service industry to delegate persons whose investible assets exceed USD 1.0 million. There is a shift in the asset allocation but majority of respondents expect a return to traditional allocation. There is an expectation of shift of advisors from full service to independent models.
According to HNW investors, private equity is the apt place to accumulate wealth over long term. Due to growth in GDP and increasing strength of equity market, HNWI population increased in the 12 largest US metropolitan statistical areas (MSAs). The US continued to experience robust growth, while New York remained the city with highest HNWI. Young HNWI developed their preferences for sophisticated services and digital offerings. Established Wealth management firms will play a major role of delivering high quality advice from both agents as well as automated platforms which will help them secure a vast market segment of the US HNWI population. According to the experts, it is estimated that by 2017 HNWI will allocate US$1.5 trillion of assets for enhancement of automated advisory capabilities. There are also major concerns arising among female HNWI in the US which includes threat of stability in financial position and anxiety about the new environment. . As the US is the largest wealth market, equities is the essential factor of the US HNW investment portfolio whereas alternative investments make up 26% of an average HNW portfolio.
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Ankur Gupta, Head Marketing & Communications