barclays wealth outlook may 24 2010

8/8/2019 Barclays Wealth Outlook May 24 2010

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U.S. High Net Worth Investors Emerge From Crisis Pessimistic and Less Trusting; -- MoneyEquates to Freedom - Not Status - for Wealthy; -- High Net Worth Investors More Risk Averse,

Yet Bullish on Equities and Real Estate; -- Wealthy Americans Less Trusting of Government andMore Pessimistic on Economic Outlook

Barclays Wealth; PR Newswire

1583 words

24 May 2010

07:03 AM

PR Newswire (U.S.)

PRN

English

Copyright 2010 PR Newswire Association LLC. All Rights Reserved.

NEW YORK, May 24 /PRNewswire/ -- Barclays Wealth, a leading global wealth manager, has published a newreport, 'The Changing Wealth of Nations,' uncovering the perspectives of high net worth individuals aroundthe world. The report, the eleventh in the Barclays Wealth Insights series, is based on a survey of more than2,000 high net worth individuals globally and examines their views on wealth and the economy, theiroutlook for the future, and how the recession has shaped their behavior.

U.S. High Net Worth Investors Emerge from Financial Crisis with a New Attitude to Investing

Recent economic events have shaped the way U.S. high net worth investors view their own investmentportfolios, their economy, and their government. More than one-third (37%) of U.S. high net worthinvestors have experienced a negative impact on their personal net worth as a result of the global economicdownturn. As a result, they are choosing to take a more active role in their money management. Nearly

half (44%) are reviewing their investment portfolio more than they were before the recession, and 22percent say they now spend more than five hours each week actively investing their money. Yet, this doesnot necessarily mean they have increased their reliance on their advisors or peers for advice. Postrecession, the majority have not changed how frequently they are speaking with their financial advisors, northeir friends and colleagues about investing (56% and 64%, respectively). Instead, they are taking mattersinto their own hands.

Matthew E. Brady, Head of Wealth Advisory, Americas at Barclays Wealth, commented: "Global economicuncertainty has prompted a new 'wealth consciousness' in high net worth individuals in America and aroundthe world. As we start the new decade, wealthy investors are paying closer attention to how their wealth isbeing managed and taking a more hands-on role in the process of investment itself. As 'engaged investors',they want to question the rationale and risks that lie behind their investment approach."

Lower risk and an increased focus on wealth preservation are top priorities for U.S. high net worth investors.

The majority (60%) divulge that the global downturn has made them more concerned about wealthpreservation, and nearly half (47%) are avoiding high-risk investments more than they were before thedownturn. However, when considering where to invest, equities and real estate are the asset classes theyexpect to perform best, with the majority of U.S. respondents predicting equities and property will do wellover the next five years.

Mr. Brady continued: "The sustained uncertainty around the prospects and timing of the global economicrecovery is causing investors to favor the familiar and perceived less complex asset classes of equities andproperty. However, the outlook among wealthy individuals is notably more cautious than their institutionalpeers."
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High net worth investors in the U.S. are particularly pessimistic about the economic outlook, and aremistrusting of government. Approximately half of the U.S. respondents believe that the U.S. (49%) andglobal (51%) economies will continue to deteriorate either over the next few years, or at least over thenext year before then improving. While approximately one-third (34%) believe the U.S. economy iscurrently stable, that same group foresees only limited growth over the next few years. Coinciding withthese sentiments is their attitude toward the U.S. government. The majority (60%) say that the downturnhas caused them to trust less in the government, and two-thirds (66%) do not feel the U.S. government

handled the economic downturn well.

Post-Crisis, Definition of Wealth has Shifted

Emerging from the global financial crisis, there is recognition among wealthy U.S. investors that thedefinition of wealth is altered. In fact, 68 percent of respondents agree that the global recession haschanged the way the wealthy are seen by others. When asked what wealth means to them, a substantial 91percent said it allows them freedom of choice in their life, and 80 percent reported that wealth is a rewardfor hard work. Only 38 percent view wealth as a means to get respect from friends and family.

Mr. Brady at Barclays Wealth commented: "It's challenging to make sweeping assumptions about how todefine wealth as, in so many cases, it is a personal decision for each of our clients. However, the recentBarclays Wealth Insights research does bring to light the fact that wealthy Americans do not take anythingfor granted and, in many cases, believe that wealth actually comes with more responsibility to set an

example, give to others, and contribute to their communities."

Interestingly, three-quarters of wealthy Americans surveyed are self-made, citing savings over time as themain source of their wealth. This statistic is consistent with the finding that they continue to prioritizesaving and not purchasing. Three-quarters of wealthy Americans (75%) identified "saving for the future" asmost important to them right now, while buying art/antiques, fashion/clothes, and interior design rankedlowest in importance to this group.

Nearly half (49%) believe the wealthy set an important example to others to be successful, while slightlyfewer (44%) do not think the wealthy have an increasing responsibility to pay higher taxes. The group issplit on their views toward charitable responsibilities. Thirty-eight percent spend more than two hours eachweek involved in charity work, but 25 percent spend no time at all. Additionally, the disparity incommitment to charitable giving is illustrated by the finding that 32 percent plan to increase the amount ofmoney they give to charitable causes, while the same number do not.

A Gender Divide in Investing Approach & Psychology of Wealth

As the number of wealthy women in America continues to increase, it is important to understand how theirattitudes toward investing and decision making are different than those of their male counterparts.According to the report, wealthy American women are less likely to consider themselves knowledgeableabout and are generally less interested in finance and investing. They spend less time activelymanaging their money, and are more likely than men to answer "don't know" when asked how they expectspecific asset types to perform. Consequently, they are also more likely to rely on others for financial advice.

Women in the U.S. view wealth as a means to happiness and status; they are more likely than men to citewealth as "a sign of success" or something that "makes me happy". In addition, when respondents wereasked to reflect on their material desires, women were more likely to declare that they already have all the

material things in the world they want.

U.S. WOMEN U.S. MEN

Consider themselves knowledgeable about finance and investing 72% 86%

Interested in finance and investing 72% 83%

Spend over two hours per week actively investing money 40% 56%


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Rely on others for financial advice 54% 44%

Wealth is a sign of success 70% 65%

Wealth makes me happy 78% 69%

Have all the material things in the world I want 68% 60%

About Barclays Wealth

Barclays Wealth is a leading global wealth manager, and the UK's largest, with total client assets of $241bn( 151.2bn pounds Sterling) as of 31 December 2009. With offices in over 20 countries, Barclays Wealthfocuses on private and intermediary clients worldwide, providing international and private banking,investment management, fiduciary services and brokerage.

Barclays Group is a major global financial services provider engaged in retail and commercial banking, creditcards, investment banking, wealth management and investment management services with an extensiveinternational presence in Europe, the Americas, Africa and Asia. With over 300 years of history and expertisein banking, Barclays operates in over 50 countries and employs approximately 144,000 people. Barclaysmoves, lends, invests and protects money for over 48 million customers and clients worldwide.

For further information about Barclays Wealth in the Americas, please visit our websitewww.barclayswealthamericas.com. Twitter page:www.twitter.com/barclayswealth

Barclays Wealth is the wealth management division ofBarclays Bank PLC, functioning through BarclaysCapital Inc. in the United States. Barclays Capital Inc., an affiliate ofBarclays Bank PLC, is a U.S. registeredbroker-dealer and regulated by the Securities & Exchange Commission. The registered office ofBarclaysCapital Inc. is 200 Park Avenue, New York, NY 10166. Member SIPC.

Methodology

This report, researched by Ledbury Research and written in conjunction with Barclays Wealth, is based ontwo main strands of research. Ledbury conducted a survey of more than 2,000 high net worth individualsfrom 20 countries including 500 from the U.S. all of whom have over $1.5 million/1 million pounds ininvestable assets and 200 of whom have more than $15 million/10 million pounds in investable assets. Theinterviews took place in February and March 2010. Ledbury also conducted a series of interviews withbusiness leaders, economists, entrepreneurs, philanthropists and other wealth experts from around theworld.

SOURCE Barclays Wealth

Jignasa Patel, +1-646-552-7967,[email protected], or Monique Wise, +1-212-526-3568,[email protected], both of Barclays Wealth

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barclays wealth outlook may 24 2010

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