Ultra wealthy Americans say work ethic is the key to achieving wealth, but it takes innovation to sustain it, according to a poll released today by SEI.
The poll revealed that while the overwhelming majority of wealthy individuals (80 per cent) believe work ethic was either very important or the most important quality in achieving their financial success, nearly all of those polled (95 per cent) agreed that innovation is important to their families’ ability to continue being successful. The results point to the realisation among wealthy families that sustaining wealth for multiple generations requires an ability to adapt to changing conditions and, at times, reinvent business or financial strategies. The survey, of more than 100 individuals representing families with more than $20 million in financial assets on average, was carried out by independent research firm Scorpio Partnership.
While the results clearly suggest that innovation is important to sustaining wealth over the long-term, respondents were mixed on where they expect innovation to come from related to their families’ wealth creation. Nearly half of those polled (41 per cent) believe professional advisors are the most likely source of innovation, while just more than a third (37 per cent) expect innovation to come from those in business, and another third (36 per cent) expect innovation to come from younger family members. Despite their expectation of innovation from professional advisors, the survey revealed that only two per cent of respondents view wealth management as the most innovative industry. Although, only about a third of those polled (34 per cent) said the wealth management industry is not very innovative.
"Wealthy families are craving new ways of communicating and collaborating with their advisors, and new strategies for building and sustaining wealth. After everything that’s gone on in recent years, they understand that sometimes it takes a different approach to be successful," says Michael Farrell, Managing Director for SEI Private Wealth Management.
The survey showed that there is no real consensus among wealthy families on which areas of wealth management have seen the most innovation. Investment products were pointed to as the area that has seen the most innovation by 11 per cent of respondents. According to the survey, investment advice was named as the area of wealth management that has seen the least innovation by 14 per cent of those polled, followed by reporting (12 per cent), and education and family communications (11 per cent each).
The impact of innovation on wealth management is seen as very positive or mainly positive by 86 per cent of respondents. Respondents pointed to better information and empowerment as the areas where innovation provides the most benefit.
The survey results suggest that while wealthy families view innovation as important, there’s no real consensus on where it should come from or how it should be inserted into the wealth management process to achieve the most value.
