Wealthy Investors Sit on Sidelines over Further Price Decline Concerns, Barclays Wealth Survey Says (Business Wire)
Mon, 15 Jun 2009 17:52:00 Etc/GM
For now, wealthy investors surveyed indicate they have little inclination to take on any added risk, even when they recognize that significant investment opportunities may exist in the current environment, specifically:
- 88 percent of wealthy investors surveyed said that opportunities exist in the current market
- 68 percent of these wealthy investors (UAE, 71 percent; India, 69 percent; US, 63 percent; UK, 55 percent) may be shying away from market opportunities because they believe the risk of further price falls is too high
- Of those surveyed, UK investors (37 percent) are most likely to increase the level of risk in their portfolios, followed by individuals in the UAE (36 percent) and Hong Kong (33 percent). Investors in Spain and India (13 percent and 16 percent, respectively) are the least likely to assume more risk
“The challenges presented by this economic upheaval have left many wealthy investors in untested, thorny territory,” said Aaron Gurwitz, Head of Global Investment Strategy for Barclays Wealth. “This report paints a very clear picture of the new financial and behavioral characteristics of today’s wealthy investors and the ways in which they’re adapting to a world that is clearly very different from anything they’ve experienced before.”
Quest for Simplicity
Of those surveyed, wealthy investors who plan to make changes to their asset allocation in the year ahead may do so with investments that are comfortable, familiar and simple:
- Domestic stocks (20 percent), real estate (25 percent), government bonds (22 percent) and cash (20 percent) rank near or at the top of preferred asset classes
- Real estate is most favored by UAE and Hong Kong investors (31 percent and 30 percent, respectively), and least favored by investors in Spain (13 percent) and Switzerland (17 percent)
- The intent to allocate to domestic stock was highest in the US and the UK (30 percent and 21 percent, respectively) while investors in Spain (5 percent) and Hong Kong (10 percent) are among the least likely to favor this asset class
“The widespread sense of caution and risk aversion highlights the extent to which wealthy investors have been restrained by the events of recent months,” noted Mr. Gurwitz. “It may be quite some time before we see both confidence and a heightened appetite for risk return to the market.”
Shifting Priorities in Provider Selection
Key elements of the due diligence process appear to be assuming more importance to wealthy investors, with results pointing to almost half of all respondents planning to spend increased time selecting specific investments. Based on investors surveyed, indications are that priorities for selecting an investment provider will also undergo changes in the year ahead, including:
- Quality and transparency of information from an investment provider is taking on increased importance (35 percent in the year ahead vs. 25 percent a year ago)
- Financial stability of the investment provider (46 percent in the year ahead vs. 33 percent a year ago)
- Reputation of the provider has decreased as an imperative (55 percent in the year ahead vs. 63 percent a year ago)
“The financial and economic crisis has had a considerable effect on the framework within which high net-worth investors view their investments,” noted Mr. Gurwitz. “The time horizon for assessing performance has been dramatically shortened, and concerns about liquidity, transparency and what they’re actually investing in have become much more important.”
Methodology
The survey was commissioned by Barclays Wealth and conducted online and by phone by the Economist Intelligence Unit (EIU) between March and May 2009. The 2,100 respondents were recruited from the EIU databases. Canada, the United Arab Emirates, Hong Kong, India, Monaco, Singapore, Spain, Switzerland, the United Kingdom and the United States were each represented by 100 respondents. Additional respondents were generated from elsewhere in the world (30 percent North America; 30 percent Europe; 30 percent Asia Pacific; and 10 percent Middle East, Africa and Latin America). Forty percent of respondents had between US $750,000 and US $1.5 million in investable assets; 40 percent between US $1.5 million and US $15 million; 10 percent between US $15 million and US $45 million; and 10 percent in excess of US $45 million.
About Barclays Wealth
Barclays Wealth is a leading global wealth manager, and the UK’s largest, with total client assets of $210bn (£145bn), as of 31 December 2008. With offices in 25 countries, Barclays Wealth serves affluent, high net-worth 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, credit cards, investment banking, wealth management and investment management services with an extensive international presence in Europe, the Americas, Africa and Asia.
With more than 300 years of history and expertise in banking, Barclays operates in over 50 countries and employs more than 155,000 people. Barclays moves, lends, invests and protects money for over 48 million customers and clients worldwide.
For further information about Barclays Wealth in the Americas, please visit www.barclayswealthamericas.com.
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Barclays Wealth is the wealth management division of Barclays Bank PLC, functioning through Barclays Capital Inc. in the United States. Barclays Capital Inc., an affiliate of Barclays Bank PLC, is a U.S. registered broker-dealer and regulated by the Securities & Exchange Commission. The registered office of Barclays Capital Inc. is 200 Park Avenue, New York, NY 10166. Barclays Bank PLC is registered in England and Wales (registered no. 1026167) with a registered office at 1 Churchill Place, London, E14 5HP, United Kingdom. Barclays Bank PLC is authorized and regulated by the Financial Services Authority. Member SIPC.
Contact:
Barclays Wealth Jignasa Patel, Corporate Communications 212-526-6435 / 646-552-7967 or Monique Wise, Corporate Communications 212-526-3568 / 917-544-9085
source: http://biz.yahoo.com/bw/090615/20090615006219.html?.v=1