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US HNWs remain confident despite global challenges

David Barks Senior Director 05/04/2022

Younger millionaires are particularly bullish

Millionaires are the owners of a large proportion of invested wealth. Understanding their perceptions can guide wealth managers and luxury brands communications and strategies.

US High Net Worth (HNW) confidence is at 120 in Q1 2022, dropping only 7 points year on year. This was in the face of government warnings of potential war and Russia’s subsequent aggression toward Ukraine throughout the month of February. Interestingly the distance to the conflict for most millionaires is clear as the same figure for Q1 2020 at the start of the COVID pandemic was a bearish 97. Similarly, US millionaires are more confident than their UK counterparts (115) this quarter.

US HNW confidence this quarter is buoyed, particularly by young millionaires under the age of 35 who are very optimistic about the future of their personal savings and investments and the global economy. Luxury spending will likely be maintained, given this highly positive sentiment.

Confidence in investment and saving strategies is positive across all asset levels and incomes suggesting an underlying confidence in markets, financial decision-making, and advice from brokers. The Dow Jones Industrial Average remains well above the 2020 crash, maintaining many of the gains since.

Generally bullish about their investment strategies, HNWs over 55 have become very pessimistic about the global economy citing the potential prospect of a financial crisis or recession as their leading concern.

Regionally, millionaires in the digital tech-dominated West and Pacific are the most confident about the global economy compared to those in the Midwest rustbelt. Advisors here will need to work harder to reassure clients.

Millionaires currently see their biggest investment risk as increased inflation (54%). Men are much more likely to cite this than women, who are more likely to be unsure of their investment risks. Further communication to female millionaires to ensure they’re informed is vital for positive wealth management.

1 in 3 millionaires is also concerned about equity market volatility. How equity markets are affected by the likely protracted fallout from the Western sanctions on Russia remains to be seen. But wealth managers will again be seen to be earning their fees as the wealthy seek to shield themselves from further turmoil and divest Russian assets where possible.

The Savanta HNW confidence index uses Savanta’s MillionaireVue Omnibus, a representative survey of the US millionaire population (n=311) conducted in February 2022.

Savanta’s MillionaireVue is a quarterly omnibus with c. 500 HNWI’s in each of the UK, US, and China. For more information, please click here.

To find out more about our wealth & luxury team’s work or to speak to one of our wealth specialists, please click here.