Wealthy U.S. investors under 50 years old represent a huge revenue opportunity for financial services firms that are willing to compete for their business, according to a new report released this month by Cisco Internet Business Solutions Group (IBSG).
Cisco IBSG recently surveyed 1,000 wealthy U.S. investors (those with at least $500,000 of investable assets) in an effort to understand their attitudes toward investing in today's challenging economic environment, their relationships with financial advisers and how they prefer to interact with financial services firms and advisers.
These were the survey's key findings:
- Wealthy investors have suffered losses that soured their attitude toward investing and made them pessimistic about their future prospects.
- Despite these concerns, most wealthy investors have stayed with their financial advisors through the financial crisis, and remain satisfied.
- Wealthy investors spread their assets across multiple firms and financial advisors.
- Nearly one-third of wealthy investors do not have a financial advisor because they either doubt the financial advisor value proposition, or think the fees charged are too high, or do not believe advisors have their clients' best interests at heart.
The Wealthy Under-50 Opportunity
Cisco IBSG's research found that wealthy investors under 50 years of age are a crucial customer segment, holding 28% of total wealth in the U.S. across all asset classes. This group, the survey found, constitutes an $18.6 billion revenue opportunity for North American financial services firms that are willing to meet their needs; conversely, they pose a serious challenge to wealth managers that fail to tailor their approach to these investors.
