Financial Expectations, Realities Don’t Align

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    There is a lack of cohesion among the financial expectations, behaviours, and realities of America’s ultra-high-net-worth (UHNW) individuals, says data by SEI and Scorpio Partnership. The disconnect presents these individuals with an opportunity to take a more strategic approach to wealth management, allowing for even greater financial success. The report, ‘Algorithms of Wealth,’ shows UHNW individuals expect, on average, that their portfolio investments will grow 15.8 per cent in the coming year, clearly indicating a level of return generally associated with taking more concentration and market risk. However, at the same time, 59 per cent say their biggest anxiety is running out of money. A shift occurs when comparing respondents under the age of 40 with those between 40 and 59 years old. The younger group expects roughly 24 per cent growth in the coming year and 44 per cent report running out of money as a top concern. Respondents in their 40s and 50s expect less growth (14.2 per cent) and are much more likely to cite running out of money as their top financial concern (65 per cent). Coupled with the anxiety of running out of money is the UHNW’s anticipated increase in spending. More than one-third of ultra-wealthy expect their spending to grow by up to 25 per cent in the next five years. The young ultra-wealthy are the most likely of all age groups to expect the greatest increases in spending. Twenty-two per cent anticipate an increase of 25 to 49 per cent and seven per cent expect an increase of at least 50 per cent. By comparison, the 40 to 59 year-olds, who anticipate lower returns than their younger counterparts and are more likely to exhibit fear of losing their money, largely expect increases of less than 25 per cent.