Wealthy clients are upbeat about reaching their wealth management goals, but still holding onto significant cash reserves, according to a new UBS survey.
“We see optimism, but a guarded optimism,” says Mike Ryan, Americas chief investment officer at UBS Global Wealth Management.
Eighty-four percent of clients reported being highly confident about achieving personal financial milestones, up from 77% from the previous quarter when UBS last surveyed wealthy investors. Clients reported that 23% of their portfolio is in cash. At the same time, 65% of respondents said stock market volatility represented an opportunity.
Rich investors were less also upbeat about the U.S. economy. Just over half, 56%, expressed optimism about the U.S. economy. That figure was down from 62% for the fourth quarter.
An emphasis on financial planning has likely boosted client optimism, Ryan says. “Clients who have focused on a long-term approach and plan are far less prone to make short-term emotional decisions,” he says.
A third of business owners are planning to sell or pass on their businesses, according to the survey. That could offer another potential planning opportunity for advisors.
Mark Sanborn, head of the wirehouse’s Americas investment platforms and solutions unit, says that from speaking with some clients, business owners might find this an opportune moment to sell, given the nearly decade-long economic expansion.
The wirehouse polled 400 clients with at least $1 million in investable assets and 100 business owners with at least $250,000 in annual revenue and at least one employee other than themselves.
A broader survey that included high-net-worth investors from other countries found increasing use of sustainable investments. Rich clients reported that 27% of their portfolios are in such products, up from 22% five years ago.
“As families become wealthy, they focus on things beyond pure financial goals,” Ryan says.
