A new survey of high-net-worth investors with more than $2 million in investable assets found that most expect to at least triple their net worth in the next decade, a sure sign that the affluent expect the market's recent momentum to continue for the foreseeable future.
The survey, conducted by the Scorpio Partnership in conjunction with Standard Chartered Private Bank and an asset manager and investment processor SEI, queried 1,751 high-net-worth individuals around the world to gauge their investment goals, values and overall investment mindset heading into the second decade of the millennium.
After sustaining heavy losses throughout the past three-plus years, high-net-worth investors' confidence has surely been buoyed by the recent strong performance of the stock market as the Dow Jones Industrial average and the NASDAQ have rallied up more than 18% and 26%, respectively, in the past year.
Respondents said they were confident their $2 million-plus in assets would increase to more than $6.4 million by decade's end, an expectation they attributed to both their individual entrepreneurial skills and investing acumen and their optimistic outlook for the world economy as a whole.
"These HNWs are setting the pace of wealth creation and wealth consumption," said Sebastian Dovey, a managing partner at Scorpio Partnership. "Getting to the heart of the success equation will enable the industry to anticipate their future needs."
The survey found that most high-net-worth individuals aren't shy about giving most of the credit to the people they believe are most responsible for their success: themselves.
Most quantified their overall energy level -- that is their effort to grow new businesses, research investment opportunities and put in the day-in, day-out labor to grow their various businesses -- as 80% higher than the average investor. Of this total energy output, this group said it expends about 60% on innovation, essentially the development of new technologies, processes and business models that will drive their economic success.
As a group, most identified Apple CEO Steve Jobs, former Microsoft CEO and co-founder Bill Gates and Virgin Group CEO Richard Branson as the individuals they most admired. They rated Apple (65%) and Google (56%) as the most prominent brands going today.
And, much like their role models, the high-net-worth respondents said philanthropy is and will continue to be another component of their long-range financial plans with 56% viewing it as a key measure of their success and 42% committing to give away at least $2,000 a year to charitable causes.
The survey results dovetail with this week's impressive spike in the Spectrem Millionaire Investor Confidence Index, which rose 15 points this month to 17, the second-largest, one-month increase in index history.
This increased confidence as well as the motivation behind this optimism provides financial advisors with compelling anecdotal data from which they can begin attracting and better servicing this elite clientele.
"Understanding trends among clients and developing innovative responses is critical to our future growth," Jacqui Brabazon, managing director and global head of marketing at Standard Chartered Private Bank, said in the report. "This is vital if we are to meet our clients’ evolving requirements, anticipate their future needs and support them in all aspects of their lives, whether this be investing or philanthropy."
High-net-worth individuals are particularly bullish in the short-term, according to the survey, with investors in Asia and Europe reporting substantial higher confidence and earnings expectations than their contemporaries in North America.