Millionaires’ future outlook reached +39 on a scale of -100
to +100—its highest since Fidelity Investments launched its Millionaire Outlook
survey in 2006.Confidence in the future was driven by positive sentiment about
business and consumer spending (+43 and +42, respectively). However, those
perceptions were hampered by a lack of confidence in the value of real estate
(-75), the economy (-49) and business spending (-32).
Millionaires, who Fidelity defines as those with $1 million
in investable assets and living in households with an annual income of at least
$150,000, are clearly divided on the current financial environment: 31% are
optimistic, 35% are pessimistic, and 34% are neutral. Interestingly, U.S.
stocks have been the No. 1 investment both pessimists and optimists have added
to their portfolios in the past year. For optimists, that is followed by
domestic equity mutual funds, domestic bond mutual funds, equity
exchange-traded funds (ETFs) and real estate investments. Besides stocks, pessimists
have gravitated to CDs/money market accounts/cash equivalents, individual
domestic bonds, equity ETFs and annuities.
Even those with a current negative outlook still have a
favorable outlook on a future recovery (+11). Additionally, those with a
negative outlook also were more actively receiving financial advice on general
financial and retirement planning.
“One trend has held true throughout the life of this study,”
noted Michael R. Durbin, president, Fidelity Institutional Wealth Services.
“The millionaire investor’s outlook has been consistently pragmatic about
current market conditions and pervasively optimistic about a future recovery.
In many ways, what millionaires have been thinking and doing can be a strong
indicator for financial trends, as they are often the first to jump on an
opportunity in the market, as they have recently with domestic stocks.”
Thus, a “key takeaway” for advisers, Fidelity said, is:
“Most millionaires have been feeling confident about the future financial
environment and may be considering shifting to more growth-oriented investments.
Domestic stocks have been the No. 1 choice of today’s millionaire investor. You
may want to consider reaching out to high-net-worth clients about their
position in the domestic stock market.”
Among the 1,020 millionaires Fidelity surveyed in
partnership with Bellomy Research, average assets are $3.05 million. Their
average age is 61, with 61% of these millionaires being men. Sixty-one percent
are married, never divorced, 57% are retired, and 58% are the sole financial
decisionmaker in their household. Seventy-four percent feel wealthy; those who
do not say they would need at least $5 million in assets.
Nearly nine out of ten, 86%, are self-made millionaires, and
they point to investments, employee stock options/profit sharing and then
compensation as their main sources of wealth. This group is more inclined to
want to manage their money themselves and to add equity investments. Among the
14% who were born wealthy, inheritance, entrepreneurship and real estate are
cited as main sources of assets, and this group of “old money” typically had
more real estate investments.
As to investment goals, 30% of today’s millionaires are
concerned with preserving their wealth, and only 20% are interested in increasing
it, Fidelity found. Top concerns of the remaining 50%: retirement income,
retirement lifestyle and managing investments in retirement.
Another key takeaway, Fidelity said, is: “Understanding your
clients’ path to wealth can help you identify more sophisticated investment
options that may suit them and help you build revenue and deepen
relationships.” Additionally: “Your clients’ outlook can help you identify and
align the best investment services for their needs.”
More results from Fidelity are here.