Bringing you live news and features since 2006 

Money and calculator

Most millionaires do not consider themselves wealthy, says UBS Investor Watch

RELATED TOPICS​

Wealth is defined as being able to live one’s life with no financial constraints, rather than reaching a specific asset level, but investors feel that it would take at least USD5m to be considered wealthy, according to UBS Wealth Management Americas’ fourth UBS Investor Watch.

 
In addition, of those who have adult children, 80 per cent are providing financial support for adult children, grandchildren or ageing parents. This support ranges from funding education (42 per cent), sharing their home (18 per cent), helping them borrow (20 per cent) and paying for large purchases (18 per cent).
 
A cash cushion of more than 20 per cent goes beyond providing cash for emergency needs and seems to give investors permission to invest other assets more aggressively. This level of cash has been consistent for three years, despite significant equity market gains during that time.
 
"Investors are telling us that wealth isn’t just about money. It’s about being able to do what you want to do when you want to do it," says Emily Pachuta, head of investor insights, UBS Wealth Management Americas. "If you ask, ‘what is wealthy?’ we observe that it’s about having no financial constraints, holding a lot of cash, taking care of family."
 
The survey of high net worth (HNW) and affluent investors found that nearly 70 per cent of investors with more than USD1m in investable assets do not consider themselves wealthy. Investors define wealth as having no financial constraints (50 per cent), as opposed to never having to work again (10 per cent) or being able to afford a luxurious lifestyle (nine per cent). Investors feel that it would take at least USD5m in personal wealth for them to be considered wealthy.
 
While the ability to afford healthcare and long-term care remains the top personal concern (27 per cent) for investors, their children’s and grandchildren’s financial situations rank second (20 per cent), trumping the ability to afford retirement (14 per cent) and the potential to outlive one’s assets (14 per cent).
 
The survey found that investors most enjoy financially helping their grandchildren (82 per cent), followed by their adult children (76 per cent) and their parents (59 per cent). Two-thirds of investors with adult children ages 18-39 currently financially support their children. Thirty-six per cent pay for minor expenses (e.g., clothes, phone bill), 31 per cent fund/help fund their education, 17 per cent pay for larger purchases and 16 per cent provide a home (and this is generally at least in part financial necessity).
 
Investors continue to hold high levels of cash (23 per cent), and with large cash holdings use them as a way to reduce their overall risk level. Investors find it important to have cash because they know they are extremely unlikely to lose it and generally find peace of mind in holding a lot of cash.
 
"Investors are using significant cash holdings as a type of ‘security blanket’ to give themselves peace of mind, but also to allow them to feel comfortable getting out there and participating in the market again,” says Pachuta. "This has translated to a greater confidence – and faith – in the economy over the long term despite investors’ expectations of continued market volatility in the near term."
 
Investors are more confident when financial plans are dedicated to long-term healthcare expenses and to providing financial support across multiple generations. When a financial plan includes these two elements, confidence skyrockets to 85 per cent, compared to 57 per cent with a more traditional financial plan.
 
Investor Watch found that 80 per cent of investors think about their assets as different buckets, with varying risk/return profiles, based on their expected use (e.g., savings, necessary purchases and recreational spending).
 
Investors see the Fed ending stimulus as positive for the long term. More than half (51 per cent) expect this change to have a negative short-term impact on the economy but will stabilize the economy in the long run. The majority of investors (59 per cent) are not changing their investment strategy as a result of the Fed announcement.

Latest News

News came last night from the US that the SEC has approved CBOE’s proposal to list and trade VanEck’s spot..
Irish domiciled funds surpassed EUR4.3 trillion AuM (Assets under Management) at end-March 2024, a 15 per cent increase in net..
European white label ETF platform, HANetf, has announced its total assets under management (AUM) has now exceeded USD4.31 billion...
New research from European ETF provider Tabula Investment Management shows investors are expecting improvements in ESG from the gold mining..

Related Articles

Timothy Rotolo, Range Funds
In 2023, Timothy Rotolo launched his business, Range Fund Holdings, the parent company for Range Indices and Range ETFs, followed...
Dan Miller, IQ-EQ
With just over a week to go till T+1 settlement begins in North America, Canada and Mexico, time is of...
Emily Spurling, Nasdaq
Last October’s ETF Express US Awards 2023 found Nasdaq winning Best Index Provider – ESG ETFs and Best Index Provider...
Vinit Srivistava, MerQube
Index provider, MerQube, launched in 2019, with the aim of providing a “technology-driven answer to the most complex, rules-based investment...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by