International Investing Appeals to Affluent Households

Nearly half (40%) of affluent households will continue to, or begin to, seek investments abroad, according to a new report from consulting firm Spectrem Group.

Of the affluent households surveyed, defined as having more than $500,000 in investable assets, about a third (31%) say they are investing more internationally now than in the past.

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The most popular countries or areas for investment are: China (30%), Europe (20%), Japan (12%), and India (11%).

Affluent households find international investing to be an alternative investment, using such investments much more frequently than some other well-known alternative investments. REITs are the most popular of other alternative investments, with 27% of affluent households investing in such vehicles. Fifteen percent of affluent households invest in private placements, 14% in venture capital, and just 8% invest in hedge funds.

“The affluent view international investing as an ‘alternative’ approach, and in many cases are seeking more than just mutual funds to satisfy their global investment ambitions. For financial advisers, this suggests a need to provide affluent clients with a sense for how to invest internationally as well as where the best opportunities might be found,” said Catherine S. McBreen, Managing Director of Spectrem Group, in a press release from the firm.

These findings are detailed in a Spectrem Perspective report, “Meeting The Affluent Investors Needs Through International Investing,” released last week. Those interested in a copy of the report can contact Spectrem Group at (312) 382-8284.

Mothers and Daughters Don’t Share Family Values on Retirement

Daughters are more than twice as likely as their mothers to enter retirement steeped in debt of $25,000 or more and be forced to work far longer than their mothers.

According to the survey of 1,267 women by MetLife, 22% of daughters are expected to rack up $25,000 or more in consumer debt (not including mortgages), compared to 12% of mothers as they head into retirement.

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The survey also showed that three-quarters of mothers retired before age 65, but only 37% of their daughters expect to retire before that age, 17% of daughters say they will be age 70 or older when they retire and 6% say they may never retire.

Nearly an equal amount of mothers (45%) and daughters (46%) say they will use their home as a source of retirement income, either through selling the home or tapping into equity. However, about three-quarters (77%) of daughters say their retirement will be funded by an employer-sponsored plan, compared with 46% of mothers who say that is the case.

Some of the other results of the survey include:

  • 34% of daughters say their biggest financial adjustment at retirement will be living on a reduced income or budget, a concern shared by 28% of mothers.

  • 65% of mothers believe the quality of their retirement has been excellent or very good, while only 46% of daughters say that about their mothers.

  • 56% of daughters believe their own retirement will be better than their mothers’ and 41% of mothers agree.

  • 90% of mothers consider Social Security as a current or future source of retirement income, compared to 75% of daughters


The full study can be found here.

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