Affluent Investors' Faith in Financial Institutions Stirred But Not Completely Shaken Amid Market Concerns

PHILADELPHIA, Nov. 16, 2010 /PRNewswire/ -- Nearly half of affluent investors are comfortable with their own financial situations but are more pessimistic about the outlook for the U.S. economy and the stock market during the next six months, according to survey findings by PNC Wealth Management, a member of The PNC Financial Services Group, Inc. (NYSE: PNC).

While 47 percent are optimistic and just 16 percent pessimistic about their own investment decisions as reflected in their portfolios, one-third (34 percent) are negative about the prospects of the stock market and 57 percent have a gloomy outlook for the economy in the next six months. Their mood is significantly darker than a year ago when just 47 percent had a negative outlook heading into 2010.

Yet according to the seventh annual Wealth and Values Survey Investors' Outlook, the wealthy are ambivalent about the results provided them by their financial institutions during the market upheaval.

Asked to assign a letter grade to their financial institution, 44 percent give a "C", saying they "didn't make much of a difference one way or another." Meanwhile, 31 percent responded with a "B", saying "they helped some but could have done more." Only one in 10 (11 percent) feel their financial institution's actions were personally harmful in some respect and rate it either a "D" or an "F". Just 15 percent said their advisors "really made a huge positive difference," or an "A", according to the survey of 1,097 affluent individuals, all of whom have at least $500,000 in investible assets.

"This should serve as a wake-up call in the financial advisory business," said Thomas P. Melcher, executive vice president and managing director of Hawthorn, the division of PNC Wealth Management that serves clients with $20 million or more in investable assets. "These results clearly tell us that most wealthy investors are willing to listen to a provider who has a better story and that managing wealth is more than managing their investments. They want someone to help them. But whoever helps them is going to have to work."

The survey indicated that three quarters (74 percent) also expect greater transparency from their financial institutions and more than half (57 percent) want more comprehensive wealth management solutions, while 43 percent are looking for more attention from their financial advisors.

The Wealth and Values Survey by PNC, which is among the nation's top 20 wealth management firms, also revealed insights about the following issues:

• Market Fears: The impact of the stock market volatility is palpable, as half of affluent Americans (48 percent) indicate they remain more apprehensive about investing than they were before the recession, while only 7 percent express greater confidence than before. The largest proportion – 44 percent, up from 32 percent last year – assert that the recession has not affected their investing approach.  Yet they continue to be more optimistic about their personal portfolios, with almost half (47 percent) optimistic and fewer than two in 10 (16 percent) pessimistic.  

• Risk Tolerance: Investors' taste for risk has changed little in the last year. Most affluent Americans (42 percent) describe themselves as seeking balance between growth and stability in their investing; the one-quarter (23 percent) who describe themselves as more conservative is identical to the proportion describing themselves that way a year ago.

• Asset allocation models: More than half (54 percent) remain confident in current asset allocation models, while nearly one-third (30 percent) are uncertain about that approach to investing. However 15 percent believe that "these models haven't worked and new models are needed."

An online media kit containing survey highlights and background information are available on PNC's website at http://www.pnc.com/go/presskits.

The PNC Financial Services Group, Inc. (www.pnc.com) is one of the nation's largest diversified financial services organizations providing retail and business banking; residential mortgage banking; specialized services for corporations and government entities, including corporate banking, real estate finance and asset-based lending; wealth management and asset management. Follow @PNCNews on Twitter for breaking news, updates and announcements from PNC.

Survey Methodology

The Wealth and Values Survey was commissioned by PNC to identify attitudes about wealth among high-net-worth individuals, how it affects their lives and their needs in managing wealth. The survey was conducted online within the United States in September and October 2010 among a nationwide cross section of 1,097 adults (age 18 or over) with over $500K in investable assets and a minimum annual income of $150K (if less than $1 million in investable assets and not retired).  Findings are significant at the 95 percent confidence level with a margin of error of +/- 3.0 percent.

The survey was designed and managed by HNW, Inc. (www.hnw.com), a strategic marketing services firm focused on the high net worth segment. The survey was supported by Artemis Strategy Group (www.ArtemisSG.com), a communications strategy research firm specializing in brand positioning and policy issues.

This report has been prepared for general informational purposes only and is not intended as specific advice or recommendations. Information has been gathered from third party sources and has not been independently verified or accepted by The PNC Financial Services Group, Inc. PNC makes no representations or warranties as to the accuracy or completeness of the information, assumptions, analyses or conclusions presented in the report. PNC cannot be held responsible for any errors or misrepresentations contained in the report or in the information gathered from third party sources. Any reliance upon the information provided in the report is solely and exclusively at your own risk.

SOURCE PNC Wealth Management