The affluent investors included in Merrill Lynch’s survey have investable assets of $250,000 or more. Those investors between the ages of 18 and 34 are substantially more concerned about every financial topic than those over 35: 99% of 18-34 year olds are concerned about the rising cost of college, whereas 41% of the over-35 pool is concerned. Ninety-four percent of the younger pool is concerned about having their retirement assets last their lifetimes, versus 63% of the older pool, and 76% of the younger pool is concerned about maintaining their lifestyle in retirement, versus 52% of the older pool.
The Affluent Insights survey also found that half (49%) of respondents meet with two or more financial advisers before choosing one to work with, and 38% interviewed three or more. When asked why they selected their adviser, taking the time to get to know them and their needs was the most common response (60%), followed by:
- Accessibility, 49%
- Was referred to them, 48%
- Good personality, 47%
- Offers a wide variety of banking and investment solutions, 46%
- Solid track record of investment returns, 43%
- Experience with similar clients to them, 42%
Additionally, 78% of affluent investors speak with their financial adviser at least quarterly, men slightly more frequently than women, according to Merrill. Fifty-seven percent of affluent investors have been working with their financial adviser for 6 years or more; with women being particularly loyal – 71% of women have been with their adviser for six or more years, versus 43% of men.
Life Lessons Prioritized
Merrill Lynch’s Affluent Insights survey also asked respondents for which life lessons they consider to be the most important to pass on to their children. Financial know-how was the most common response (48%), followed by choosing the right spouse/partner (36%), choosing the right career path (24%), or staying physically fit (17%).
As nearly half of respondents deem financial know-how to be the most important life lesson to pass on, it is not surprising that parents are teaching their children about money at a younger age than ever before – 57% of parents speak to their kids about money before they are 12 years old, and 85% before their kids are 18. Compared to a generation ago, when 42% of parents over the age of 65 spoke with their children about financial matters at a young age, compared to 76% of parents today ages 35 and 50.
Among parents who work with a financial adviser, 64% have shared with their children some form of advice they received. Such advice includes: investing for retirement at an early stage in life (47%), the importance of managing a budget (40%), managing a checking/savings account (29%), or knowing how to pay down and manage debt (26%).
The Affluent Insights survey was conducted via phone from June 6-21, 2011. It included a national sample of 1,000 individuals with investable assets of $250,000 or more, in addition to an oversample of 300 affluent respondents in five target markets (Atlanta, Boston, Chicago, Los Angeles, and San Francisco).