Wealthy Investors Are Ready for the Recovery-- and Beginning to Spend, Says HNW/Forbes Insights Survey

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America's most affluent households see the near-term future as a time of renewed growth, investment opportunity and continued consumption.

We continue to bring unique insights into how high-net-worth individuals are earning, investing and spending their money.

Despite reports of consumer austerity and economic pessimism, the nation's wealthiest households are ready for the investment opportunities of a recovery--and many are spending at prerecession levels, reports a new survey of 486 millionaires with $1M to $10M+ in investible assets from HNW, Inc., and Forbes Insights.

It seems that many wealthy individuals, seeing trouble ahead, acted sooner than the rest of us. They adjusted investments and cut consumption early in this crisis," says Ron Bel Bruno, senior vice president and editorial director at HNW. "After which it was life as usual. Now they're ready for what's next--a late-year recovery." In fact, 54% of those polled feel a 2009 recovery is under way or imminent.

In terms of discretionary spending, participants reported "No change" going forward in 13 categories of goods and services, including travel and leisure, fashion, home décor, and luxury goods. Strongest categories included:

  •     Autos (60% report "no change")
  •     Dining out and entertainment (59%)
  •     Wine/beverage spending (68%)

In one category--personal technology--14% plan to increase spending. The poll also asked the panel about its financial advisors, investments strategies, and charitable giving plans. An overwhelming 79% have retained their advisors, and 81% have not changed banks. More than six out of 10 add that they have no plans to change their retirement or estate planning strategies any further, and 51% plan to give as much or more than they have previously.

"This is another instance of how Forbes is keeping our finger on the pulse of affluent Americans," said Kevin Gentzel, president and group publisher, Forbes Media. "We continue to bring unique insights into how high-net-worth individuals are earning, investing and spending their money."

These findings highlight the survey's questions to a sampling of U.S. millionaires grappling with a troubled economy. Some key conclusions:

Millionaires are largely bullish on a recovery.

  •     More than half (54%) see the beginning of a recovery in 2009.
  •     Three in 10 of those with $10M+ investable assets feel the recovery is here.

Wealthy investors trust their advisors.

  •     71% said they would recommend their primary advisor to a friend.
  •     Over three-quarters of the respondents with $10M+ in investable assets trust their financial advisor and the advice he or she provides.

Clients leaving their advisors are drawn to self-direction.

  •     21% of the respondents say they have or plan to switch advisors. Of these, four out of 10 plan to manage their own assets.

One person's luxury is another's necessity.

  •     76% intend to maintain or increase their real estate and related spending.
  •     72% will spend the same amount or more on personal technology.

For more information, visit http://www.hnw.com (click on "News") or http://www.forbes.com/forbesinsights for an executive summary of this study.

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