Understanding the evolving money motivations of High Net Worth Individuals

Saunderson House’s third annual financial wellbeing report is now available to download.

As with our previous research into financial wellbeing, we’ve looked closely at what HNWIs (High Net Worth Individuals) are most concerned about and how comfortable they feel talking about financial matters with the family. Given the seismic social, environmental and economic change, we thought it timely to also explore how HNWIs think about ‘responsible’ investments. It’s one of the areas where we’ve experienced a huge increase in client interest over the last year.

Executive Summary

Key concerns for HNWIs

The results from this year’s financial wellbeing research show that Covid-19 has replaced Corbyn as the key concern for HNWIs. The potential fallout from the coronavirus pandemic and unease about a deterioration in general wellbeing are perceived to be the top two threats to financial independence and wellbeing in 2020.

 

 

The research shows that the high degree of concern is closely tied to worries about the impact of the pandemic on younger generations. While many older HNWIs remain insulated against the worst impacts of a recession, low interest rates and low employment, the potential impact on younger generations is only just beginning to be felt.

Responsible Investing

However, the events of 2020 – such as Covid-19, the Australian bushfires and Black Lives Matter movement – have served to increase general awareness around social, economic and environmental responsibilities.

 

 

This year’s financial wellbeing report shows that there is growing interest in how HNWIs can use their money to both support their family and back relevant causes and movements. Our research suggests that while many HNWIs currently make charitable donations, there is an opportunity to make even more of an impact via responsible investments.

Perhaps unsurprisingly, the appetite for responsible investment is largest among the younger generation. They have a growing influence over how their parents think, encouraging them to consider new ways to make money and make a difference. And there is mounting interest in adopting a ‘flexitarian’ approach to investments, whereby a select part of the portfolio is dedicated to responsible investing.

However, despite growing interest, our research shows that knowledge, understanding and access to information remain the primary barriers to responsible investing among HNWIs.

Generational differences

Building on last year’s research, which recommended more family conversations around financial wellbeing, it looks like there is growing understanding about the financial goals and ambitions of different generations. Rightly or wrongly, Millennials lay claim to the best level of understanding of all other generations. Baby Boomers are also relatively confident that their financial goals and ambitions are well understood by different generations.

 

To download the full report, please click here.

About The Author

Olly Cheng
Olly started at Saunderson House in 2008, following the completion of an M.Phil in Social and Economic History from ...
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