World Very High Net Worth (VHNW) Financial Services Report 2022: Industry's Advisors and Wealth Managers have Pivoted their Strategies as they Respond to the Mutability of Wealth and the Wealthy

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Dec 16, 2022, 10:30 ET

DUBLIN, Dec. 16, 2022 /PRNewswire/ -- The "Financial Services for the Very High Net Worth (VHNW)" report has been added to ResearchAndMarkets.com's offering.

This new report analyzes each segment of the affluent market (high-net-worth, very high-net-worth and ultra high-net-worth) and its relationship with the financial services industry. The report offers a particular focus on the very high-net-worth (truly affluent) segment.

The financial services industry always rises to the task of profitably serving the needs of the most affluent Americans. The industry's advisors and wealth managers have pivoted their strategies as they respond to the mutability of wealth and the wealthy.

Over time, wealth managers have seen every characteristic of wealth management change; from the magnitude of that wealth (today, the 10 richest Americans own 288% more of the world's wealth than in 1960) to its origins in entrepreneurship rather than inheritance and to the holding of wealth in a sophisticated array of investment vehicles rather than bank trusts.

Two concurrent trends have left a gap in market research into the affluent market: The rise of defined contribution plans and the increasing wealth of the ultra high-net-worth. The rise of defined contribution retirement plans (e.g., 401(k)s) shifted retirement savings obligations from employers and their pension plans to employees themselves.

Each time an employee changes jobs or retires, the balance in their retirement savings account moves with them, shifting over $500 billion a year from 401(k)s to traditional IRAs. This "new" money funneling into traditional financial services companies offering rollover IRA accounts created an industry-wide focus on the mass affluent and high-net-worth markets ($500,000 to $5 million in investable assets).

The ultra high-net-worth individual, with $30 million or more in investable assets, has always beguiled the money management industry. The wealthiest Americans, with their multi-generational wealth, corporations and foundations and complex financial and estate planning strategies have generated enormous fees for financial services firms and as the cohort's control of American wealth continues to increase (from 29% of household net worth in 2007 to 32% in 2022), the competition to serve the top 300,000 of the wealthiest American households only intensifies.

This new research has a particular focus on the group of wealthy individuals who comprise the very high-net-worth segment (those with $5 million to $30 million in net worth).

With the financial services industry focused on the wealth directed their way through rollover IRAs and their traditional focus on the ultra high-net-worth market, the group of 1.8 million households, that are all in the top 1% and top 2% of households by net worth, have needed a fresh analysis to understand who is in the very high-net-worth category, what these households own and how their assets are managed, as well as the group's demographics and their lifestyle preferences.

The report estimates that the truly affluent generate, at a minimum, $568.9 billion in asset management and other financial transaction fees for the financial services industry.

Key Topics Covered:

1 Scope & Methodology

Report Scope
Report Methodology

2 Executive Summary

Why the Truly Affluent/VHNW Market?
The Four Buckets of Investors
Different Generations Need and Want Different Products and Services

3 Wealth of American Households

Global and U.S. Economies Determine the Top 1%
Wealth Concentration in the U.S.
Post-World War II, Many of the Richest Have Been Entrepreneurs
In 1957, 60% of the Richest Americans Had Inherited Their Fortunes
U.S.'s 8 Richest are Worth $1.1 Trillion
In 2022, Richest Americans are Entrepreneurs
Global Wealth Has Surged Since 1960
In 2019, Top 10% Saw Their Percentage Ownership of U.S. Assets Decline
While Share of Assets for Top 10% Declined, Top 1%'s Grew
Bottom 50% of Households Did Not Recover From the Global Recession Until 2016
Global Recession Led to Asset Stagnation of More Affluent Population Percentiles
Composition of Assets Change as Household Wealth Declines
Net Worth Mirrors U.S. Society
Age and Wealth
Education and Wealth
Home Ownership and Wealth
Race, Ethnicity and Wealth
Home Ownership and Net Worth

4 Demographics of the VHNW

Demographics of the VHNW
Counting the VHNW/VHNW
Breaking Out the Data: Who's In the Top 1%?
Very High Net Worth is Relative
Where Do the VHNW Live?
Composition of HNW, VHNW and UHNW Households
Affluents and Employment

5 Financial Services and the VHNW

VHNW Revenue for Financial Services Industry
Wealth Management Firms
Fintech Enters the Field
Big Brokerages Have Swamped Smaller Robo-Advisors
Complex Finances Require Wealth Managers
Wealth Managers Access Multiple Layers of Experts for VHNW
Perks Offered VHNW are Less Impressive than Those Offered by High End Credit Cards
What are the Valuable Privileges Offered to VHNW?
Private Capital and the Wealthy Investor
Family Offices
The Largest Family Offices Have Assets of Billions
Bank Accounts
Bank of America Private Bank
Table Bank of America Preferred Rewards for VHNW Private Bank Clients, 2022
Citigold Private Client
Wealth Managers
Why Do Rich People Earn High Returns?
Types of Money Managers
The Largest Global Wealth Managers