Affluent Investors Very Optimistic About Their Finances

Nearly 90% who work with an adviser want them to serve as a partner.

Affluent investors are very confident about their financial health, with nearly three-quarters, 74%, saying they are saving enough to meet their retirement goals, according to the Wells Fargo Affluent Investor survey.

However, more than half, 54%, worry about losing money during market turbulence. Thirty-nine percent don’t trust themselves to manage their investments during market turbulence. That jumps to 49% for affluent women and declines to 33% of men. The affluent have a median of $450,000 invested in the market, but 20% are not sure how much they have in the stock market.

Affluent investors value their advisers, with 61% currently working with a financial adviser. Nearly 90% of this group want their financial adviser to act as a partner in their financial planning, rather than just telling them what to do with their money. And 70% say their financial adviser is as important to them as their doctor.

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“A financial adviser can help by developing an investment plan that offers clarity and direction through market turbulence so investors can stay on course and transfer wealth to their heirs,”says Joe Nadreau, head of innovation and strategy for Wells Fargo Advisors. “A financial adviser’s ability to recognize and acknowledge a client’s natural response to market volatility is the key to making sure that rational perspective prevails, and that’s something that investors say they appreciate.”

NEXT: How much affluent investors have saved.  

The vast majority of affluent investors (92%) are very or somewhat confident they will have enough money to live the lifestyle they want throughout their retirement. Overall, non-retired affluent investors expect to need a median of $1.2 million and have saved an average of $750,000. Affluent investors with $250,000 to $1 million in investable assets expect to need a median of $1 million in retirement and have saved $500,000. High-net-worth investors with more than $1 million in savings expect to need a median of $2 million in retirement and have saved $1.9 million.

Affluent investors do have some regrets, however. Thirty-seven percent of affluent investors wish they had made better investments over the years, and 29% regretted not saving more and spending less. Only 15% said they wish they had enjoyed their money more.

Fifty-seven percent of affluent investors say that leaving an inheritance is important to them, and 71% have taken steps to leave an inheritance. Among the 29% who have not taken any steps to leave an inheritance, many say they find it hard to get that conversation started. Twenty-five percent say they find it difficult to talk to their family about their estate plan and don’t understand the complexity of transferring wealth to the next generation.

NEXT: Attitudes toward automated investing tools.

 

While affluent investors want to have access to automated investing tools and their accounts, they do not view technology as replacing the work of their financial advisers. Seventy-nine percent say it is important for them to have access to their investment information at any time, and 66% say it’s important for them to aggregate all of their accounts from multiple financial institutions online.

Fewer than one-quarter (22%) of affluent investors are familiar with robo-advisers, and another 22% say they are very or somewhat familiar. More than three-quarters of affluent investors with an adviser would like their adviser to use automated tools to determine the most financially beneficial portfolio mix—but 66% say a robo-adviser could never take the place of their financial adviser. Sixty-five say they would like to use technology to manage their investments, but with the help of an adviser.

Not surprisingly, younger affluent investors are more receptive to working with a robo-adviser, with 71% of those in their 30s saying they would be amenable. This falls to 61% for those in their 40s, 46% for those in their 50s and 27% for those between the ages of 60 and 75. Among all age groups, 52% say they will never be comfortable working with a robo-adviser. 

The Wells Fargo Affluent Investor survey evaluated the opinions of 1,983 affluent investors between the ages of 30 and 75 who have $250,000 or more in investable assets, not counting their retirement or property assets. The survey was conducted between May 5 and May 26.

Average HSA Balance Rose 37% in 2014 to $1,933, EBRI Says

Today, 17 million policyholders and dependents are covered in 13.8 million accounts.

The average health savings account (HSA) balance increased 37% in 2014, from $1,408 to $1,933, according to the Employee Benefit Research Institute (EBRI). For those under the age of 25, balances averaged $655, and for those age 65 or older, they were $5,016. Today, 17 million policyholders and their dependents are covered in 13.8 million accounts holding $24.2 billion in assets as of year-end 2014.

EBRI’s figures are based on its database of 2.9 million HSAs with $5 billion in assets. EBRI said that in 2014, 70% of these accounts received contributions, either from individuals or from employers. Eighty percent of the accounts with contributions had a distribution in 2014, EBRI said. These accounts with both a contribution and a distribution ended the year with an average account balance of $2,105. Those without a distribution had an average of $3,428 in the account at the end of 2014.

Thirty percent of the accounts in the EBRI HSA database had neither employer nor individual contributions in 2014. These accounts started the year with an average balance of $1,054 and ended it with an average balance of $892.

Individual contributions averaged $1,121 in 2014, and employer contributions averaged $527. Distributions for medical claims averaged $1,194. Overall, 53% of HSAs had individual contributions, 52% had employer contributions, and 61% had distributions, according to EBRI.

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NEXT: The impact of participant age and number of years an HSA is held

The average distribution for health care claims increased with age, except for those age 65 and older. For those under age 25, the average distribution was $636. For those between the ages of 55 and 64, that rose to $2,373. However, it dipped slightly, to $2,124, among individuals age 65 and older.

Also, the longer an individual has held an HSA account, the higher the average amount distributed for health care claims. Those who opened an account in 2004 had an average annual distribution of $3,262, compared with $2,319 for those who opened an account in 2011.

Not surprisingly, contributions increase by age. For those under age 25, contributions averaged $1,023, and for those between the ages of 55 and 64, they averaged $3,317.

The average HSA contributions that EBRI found are higher than the findings from HelloWallet, which, using 2013 data on 400,000 HSA accounts from UMB Bank, found that the mean deferral was $1,591 and the median deferral was just $700.

EBRI’s issue brief on HSA contributions, distributions and average account balances can be uploaded here.

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