Maybe the wealthy really aren’t all that different from the rest of us. Rich investors are growing increasingly anxious about the economy and their ability to maintain their financial position, a new survey finds.
The Spectrem Group, a Chicago-area consultancy specializing in the affluent and retirement markets, regularly surveys investors with $100,000 or more in investable assets. The surveys from the first quarter of this year found that four out of five millionaire investors – those with a seven-figure net worth, excluding their primary residence – cited the prolonged economic downturn as a main concern. That’s up from 70 percent for the same period last year.
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Wealthy investors – those with between $5 million and $25 million in assets – are similarly worried, with 77 percent saying the sluggish economic recovery was weighing on them, up from 69 percent last year. Those super-rich, though, are slightly more worried by the national debt (cited by 82 percent) and the state of U.S. politics (80 percent).
The upcoming elections – and the tax changes they might bring – are also big concerns for the well-to-do. Six out of ten millionaires and 65 percent of mega-millionaires say they’re worried about tax increases. Within the millionaire group, 74 percent of senior corporate executives are concerned about a tax hike, while business owners are significantly less worried, with 55 percent expressing unease.
Despite the political debate surrounding tax reform – and President Obama’s push for the so-called Buffett Rule, which would set a minimum tax rate of 30 percent for taxpayers earning $1 million or more – those overall levels of concern are actually significantly lower this year than they were a year ago. The 2011 survey found 70 percent of millionaires and 73 percent of multi-millionaires anxious about tax hikes.
With the Buffett Rule blocked by Republicans in the Senate and the prospect for other tax reforms still further out on the horizon, the rich say they aren’t planning any major investment changes. Just 28 percent of millionaires and 40 percent of the wealthy say they’re making big portfolio moves because of possible tax changes. “It is likely that many of these households have already integrated tax advantaged strategies,” the Spectrem report notes.
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More than 60 percent of the wealthy cite concerns about maintaining their financial status, up from 44 percent last year – and they’re growing more worried about the financial future of their children and grandchildren, with 66 percent of wealthy investors mentioning that as a concern, up from 57 percent a year ago. Even with all that, 52 percent of millionaires and 55 percent of the “ultra high net worth” group say they expect their financial situation to improve this year. And more than 40 percent of wealthy investors believe their financial situation will improve after the election in November.
