Only 6% of wealthy investors with $500,000 or more in investable assets characterize themselves as enthusiastic about investing, while a full 49% are either reluctant or tentative about returning to the market, PNC Wealth Management found in its sixth annual Wealth and Values Investors’ Outlook survey of 1,046 investors.
However, affluent investors were evenly split on their outlook for an economic rebound, with 40% expecting the economy to remain stagnant for another full year, and 51% anticipating improvement within the next six months. Among the ultra-wealthy, the outlook is slightly dourer, with 52% foreseeing the economy remaining stagnant for another year.
The crisis of the past two years has evidently taught wealthy investors that their self-assessed risk tolerance is not nearly as high as they had thought, and that they must focus on their needs rather than their desires through a properly integrated wealth management program, said Thomas P. Melcher, executive vice president and managing director of Hawthorn, a PNC Wealth Management division serving investors with $20 million or more in investable assets.
“There is no doubt that the last year has taken its toll on wealthy investors. Unfortunately, it often takes a severe crisis and a significant loss of capital for investors to discover their true risk tolerance,” Melcher said. “The survey results validate the value of an integrated wealth management model, one that combines estate, financial and tax planning with investment management.”