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Breaking the mould: A question of personality


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Written by the Economist Intelligence Unit on behalf of Barclays Wealth, this sixth volume of Barclays Wealth Insights examines the behaviour and attitudes of wealthy investors during times of volatility.

In this report, ‘Breaking the Mould: A Question of Personality’, we examine the choices that wealthy investors make especially during periods of volatility and explore the characteristics that determine why they make those choices.

As well as consulting with 2,300 wealthy individuals around the world, the Economist Intelligence Unit has once again worked with a panel of experts, drawn from academia, industry and financial circles, to provide additional insights and perspectives.

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Breaking the mould: A question of personality

  1. 1. Barclays Wealth InsightsVolume 6: Breaking the Mould: A Question of Personality In co-operation with the Economist Intelligence Unit
  2. 2. About Barclays WealthBarclays Wealth, the UKs leading wealth manager with total client assets of £133 billion globally (as of 31 December2007), serves affluent, high net worth and intermediary clients worldwide. It provides private banking, fiduciary services,investment management and brokerage. Thomas L. Kalaris, the Chief Executive of Barclays Wealth, joined the businessat the start of 2006.Barclays Wealth is part of the Barclays Group, a major global financial services provider engaged in retail andcommercial banking, credit cards, investment banking, wealth management and investment management serviceswith an extensive international presence in Europe, the USA, Africa and Asia. It is one of the largest financial servicescompanies in the world by market capitalisation. With over 300 years of history and expertise in banking, Barclaysoperates in over 50 countries and employs over 134,000 people. Barclays moves, lends, invests and protects moneyfor over 27 million customers and clients worldwide.For further information about Barclays Wealth, please visit our website this reportWritten by the Economist Intelligence Unit on behalf of Barclays Wealth, this sixth volume of Barclays Wealth Insightsexamines the behaviour and attitudes of wealthy investors during times of volatility. It is based on two mainstrands of research.First, the Economist Intelligence Unit conducted a survey of 2,300 affluent and wealthy investors with investableassets ranging from £500,000 to in excess of £30 million. Respondents were spread across a number of keyinternational markets, with the highest numbers of respondents from the United States, India, United Kingdom,Singapore, Hong Kong, Canada, Switzerland, Spain, the United Arab Emirates and Monaco. The survey took placebetween March and April 2008.This was supplemented with a series of in depth interviews with experts on wealth and behavioural finance. Ourthanks are due to the survey respondents and interviewees for their time and insight. This item can be provided in Braille, large print or audio by calling 0800 400 100* (via TextDirect if appropriate). If outside the UK call +44 (0)1624 684 444* or order online via our website *Calls may be recorded so that we can monitor the quality of our service and for security purposes. Calls made to 0800 numbers are free if made from a UK landline. Other call costs may vary, please check with your telecoms provider. Lines are open from 8am to 6pm UK time Monday to Friday. Barclays Wealth is the wealth management division of Barclays and operates through Barclays bank PLC and its subsidiaries. Barclays Bank PLC is registered in England and is authorised and regulated by the financial Services Authority. Registered No. 1026167.For information or permission to reprint, please contact Barclays Wealth at: Registered Office:1 Churchill Place, London, E14 5HP.Barclays Wealth Insights, Barclays Wealth, 1 Churchill Place, London, E14 5HPTel. 0800 851 851 or dial internationally +44 (0)141 352 3952 or visit © Barclays Wealth 2008. All rights reserved.
  3. 3. ForewordAt Barclays Wealth we are dedicated to providing our clients with the means to manage their wealth successfully.For this reason, we are committed to investing in research to better understand the value of wealth and itsimportance in the future.In partnership with the Economist Intelligence Unit, we have developed the sixth volume of Barclays WealthInsights, a series of research reports which aim to provide a definitive picture of what being wealthy means inthe 21st century.In this report, ‘Breaking the Mould: A Question of Personality’, we examine the choices that wealthy investors makeespecially during periods of volatility and explore the characteristics that determine why they make those choices.With a wide range of information, advice and options available for investors accompanied by rapid rates of financialinnovation, keeping up with trends in a time of market uncertainty can be a challenge. The following pagesunderscore the importance of how personality traits and cognitive biases of investors can play a central role ininfluencing investment making decisions and the significance of expert advice in helping to close the knowledge gap.As well as consulting with 2,300 wealthy individuals around the world, the Economist Intelligence Unit has onceagain worked with a panel of experts, drawn from academia, industry and financial circles, to provide additionalinsights and perspectives.We hope that you find this volume an informative and enlightening read, and we invite you to look out for futureissues of Wealth Insights.Thomas L. KalarisChief ExecutiveBarclays Wealth
  4. 4. Our Insights PanelLiam Bailey, Head of Residential Research, Knight FrankNeil Beaton, Chief Investment Officer, Deloitte Private Client Services GroupRosalyn Breedy, Counsel, international law firm WithersFergal Byrne, Author of Barclays Wealth Insights reportJohn Clemens, Managing Director, Tulip Financial ResearchGreg Davies, Head of Behavioural Finance, Barclays WealthStefan Jaecklin, Head of the Wealth and Asset Management practice, Oliver Wyman Management ConsultantsMark Kibblewhite, Managing Director and Head of UK Private Banking, Barclays WealthProfessor Terrance Odean, Professor of Banking and Finance, Haas School of Business,University of California, BerkeleyRoman Scott, former Head of BCG Wealth, Calamander GroupSandy Shipton, Executive Director of Wealth Management, Dubai International Finance Centre
  5. 5. IntroductionVolatility in financial markets is nothing new. From thetulip mania of the 17th century to the dotcom crash atthe start of the new millennium, the history of finance islittered with episodes during which markets see-sawedfrom exuberance to despair and back again.In this respect, the current credit crisis, which had its During times of upheaval in financial markets, theseorigins in US sub-prime loans, is little different. responses can become exaggerated as investors seek toAlthough the context and conditions may be dissimilar protect their capital against swings in asset prices orto previous crises, the response of investors is the profit from uncertainty. As a discipline that seeks tosame – fear replaces confidence and an inevitable understand the complex psychological and emotionalmarket downturn ensues. make-up of investors, and to explain how they make what are sometimes irrational decisions, behaviouralIt has long been suspected that the personality traits finance has never been more relevant than it is today.and cognitive biases of investors play a central role ininfluencing asset prices and market cycles. In recent The aim of this study, produced by the Economistyears, a growing body of academics and practitioners Intelligence Unit (EIU) on behalf of Barclays Wealth, is tohas started to explore more carefully this intersection examine the choices that wealthy individuals make onbetween psychology and finance – usually termed their individual investment journey and, in particular, howbehavioural finance – to explain how and why investors these decisions change in times of volatility. Based on amake the financial decisions that they do. global survey of more than 2,300 affluent and high-net worth individuals, it examines the responses of investorsTraditional finance holds that individuals behave in a to volatility in financial markets in terms of how theycompletely rational way and weigh up decisions based select, manage and monitor their investment portfolio.on their access to information. In practice, however, thereality can be quite different. For example, investors canover-react or under-react to new information, discountevidence that does not support their viewpoint, ordisplay overconfidence in their own abilities. 3
  6. 6. Executive summary Volatility in financial markets draws different Investors can become pre-occupied with the responses from wealthy investors performance of individual investments, Around half of the respondents to the survey say that more than that of the overall portfolio they intend to increase allocation to cash in the current The research suggests that there is a wide range of environment, while just under one-third would switch monitoring behaviour but in general, respondents their financial adviser. Reactions differ depending on age examine the performance of specific stocks more and gender. Older investors are less likely to increase regularly than their overall portfolio, with just over half allocation to cash, perhaps because they have experience of respondents monitoring this aspect of their of previous cycles. Men are also more likely to increase investment either weekly or daily. This is a common allocation to cash and switch financial adviser than reaction to volatility. A focus on the performance of women. This reflects a general finding of the specific assets can cause investors to take decisions that research – namely that men tend to be more active in may make sense when considered on the basis of a changing their portfolio in response to new information. specific asset, but which are less rational in the context of the overall portfolio. Too much attention to specific Property remains an attractive investment for the stocks and monitoring too often can lead to over-trading. wealthy, especially in emerging markets Current variations in the performance of house prices Too much information can lead to overload, around the world have a bearing on respondents’ impacting on investor behaviour appetite for increasing allocation to property. In Individuals have never had so much financial information countries such as the UK and US, property prices are at their fingertips, with a proliferation of business falling, but in many Eastern European and Asian coverage in the traditional press and online. Too much countries, they are rising. Respondents from the main data, however, can have a negative impact on how emerging markets countries (BRIC + N11)1 were more investors behave. This can lead to levels of likely than those from the developed countries of the overconfidence, which in turn can result in excessive Organisation for Economic Co-operation and trading and the tendency to over-monitor portfolios. Development (OECD) to increase allocation to property While too much information may cause problems, some in the current environment. Emerging market investors degree of data is essential and the survey suggests that have fewer choices than their developed country peers, for today’s wealthy investor, there are three main and therefore a stronger weighting towards property categories of sources of financial information: personal can be expected, but the survey results also suggest relationships, such as friends, family and peer groups; continued strong confidence in property as an the media; and professional advisers, such as private investment in key emerging markets. Even in regions banks, business advisers and brokers. where property prices are falling, such as North America and Europe, some investors still plan to increase their 1 BRIC countries refer to Brazil, Russia, India and China; the N11 distribution to this asset allocation, perhaps hoping to countries are Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, South Korea, Turkey and Vietnam take advantage of more attractive valuations, or as a means of diversification.4
  7. 7. The age ofvolatilityIn the past twelve months, levels of investor confidencehave been severely tested by a period of volatility anddislocation in financial markets.It seems particularly timely, therefore, to investigate what Mr Davies believes that behaviour in the face of volatilityimpact such a climate has on the investment decision- is determined by what he describes as an individual’smaking process. Wealthy individuals, like any other financial personality. For example, one person may havegroup, have been affected by market uncertainty. a tendency towards pessimism, while another may haveRegardless of whether they have lost money, future a leaning towards optimism; one person may beexpectations have changed. emotionally comfortable with volatility, while another may not be comfortable with it at all.According to Greg Davies, Head of Behavioural Finance,Barclays Wealth, reactions to volatility among wealthy Given this range of outlooks and responses, it is clearinvestors are very much linked to the fact that individuals that the needs of individual investors are unique, andhave different behavioural and psychological profiles. there is no single portfolio that is appropriate in theLooking at the survey of more than 2,300 wealthy current environment. “By understanding how differentinvestors conducted by the Economist Intelligence Unit individuals react to volatility, both rationally andon behalf of Barclays Wealth, we can see a variety of emotionally, both short-term and long-term, you can seereactions to volatility. For example, some investors will what structure their portfolio should have,” says Mrspend more time analysing portfolios, while others Davies. “Once you understand people’s composure, timeincrease levels of trading, switch advisers, increase risk in frame and different aspects of their financial personality,their portfolio or change allocation to cash. you can build a portfolio designed to deliver performance that reflects the specific trade-offs with which their personality makes them comfortable.” 5
  8. 8. Cash is king When markets become more volatile, there is a These findings seem to be reflected in investor tendency amongst some retail investors towards a behaviour across different markets. “If you look at the knee-jerk reaction, on the assumption that they must statistics, there is a clear de-leveraging across the do something to respond to the changed environment. industry, and money market funds have been gaining a But, according to Mr Davies, switching right after a lot of momentum,” says Stefan Jaecklin, Head of the market downturn is not usually a good strategy and is Wealth and Asset Management Practice, management frequently akin to closing the stable door after the consultancy Oliver Wyman. horse has bolted. That said, a move to cash should not necessarily be “If you have failed to pick the turn in the market, often the interpreted as a change in willingness to support risk. best response is to stay put, particularly if you have a “We need to distinguish between being able to bear risk longer-term horizon. Of course, this is not universal, but and willingness to take on risk,” says Mr Jaecklin. generally a knee-jerk reaction is not a good one,” he adds. “Certainly there has been a reduction in some investors’ ability to take risk. If you lose substantial sums of The survey reveals that a fairly high proportion of wealthy money, your ability to bear risk is reduced. But I don’t individuals would make some substantive change in believe that there has necessarily been a long-term response to greater volatility. One of the most common change in people’s willingness to bear risk, although reactions is to increase allocation to cash – a classic de- clearly there is a temporary reduction in risk-taking due risking response when investors are confronted with to less optimistic investment prospects.” volatility in their core asset classes of equities and bonds. While in some cases this would be the right decision, the key is to consider the decision carefully, not respond in a “You need to bear in mind that, even knee-jerk way without weighing up the consequences and relative benefits of each course of action. Almost half if you maintain the same attitude to of wealthy investors questioned for the survey say that they would increase their exposure to cash in the face of risk but the volatility of the market volatility. This is despite widespread agreement among almost two-thirds of respondents that, even if they increases, you would need to reduce experience losses, they continue to see investing as a long-term activity. your exposure to risky assets”6
  9. 9. In some cases, increasing allocation to cash does not In a period of increased economic volatility, whatmean a more cautious attitude to risk. “You need to change would you expect to make to the following?bear in mind that, even if you maintain the sameattitude to risk but the volatility of the market increases, Table 1 - Per cent that would increase allocationyou would need to reduce your exposure to risky to cash by countryassets,” adds Mr Jaecklin. “This is because of volatilityrather than a change in your attitude to risk.” Country Per centA related finding from the survey shows both that UK Australia 61investors are among the least likely to increase levels ofrisk in their portfolio in response to volatility, and that China 57they are among the most likely to increase allocation to USA 51cash. Other countries whose investors are especially UK 49likely to increase allocation to cash include Australia, the Japan 47US and China. Australia and the US have been affectedby the economic slowdown and China is a country in Canada 46which investors’ allocation to cash has traditionally Singapore 44been very high. India 42 Spain 42 Italy 42 UAE 41 Monaco 40 Germany 40 Hong Kong 39 Switzerland 35 In a period of increased volatility, what change would you expect to make to the following?Graph 1 - All respondents Allocation of my existing investments to cash 15% 33% 32% 12% 8%The amount of times I trade in the stock market 13% 26% 36% 16% 9% Time spent analysing portfolio 18% 33% 31% 11% 7% Likelihood that I would switch fund manager 10% 22% 48% 14% 7% Likelihood that I would switch bank 9% 19% 50% 14% 8% Level of risk in portfolio 9% 25% 33% 23% 10% 0 10 20 30 40 50 60 70 80 90 100 Significant increase Small increase No change Small decrease Significant decrease 7
  10. 10. Age also has a bearing on asset allocation in volatile trading frequency. This is likely to reflect the fact that times. From the survey results, we can see that younger older investors will have more experience of previous respondents (those under the age of 50) are more likely cycles, and so tend to be less nervous in the face of to increase their allocation to cash during market volatility than the younger generation. upheaval than respondents over the age of 50. Younger respondents are also more prone to increase their In a period of increased volatility, what change would you expect to make to the following? Graph 2 - Respondents aged 50 and over Allocation of my existing investments to cash 16% 27% 34% 13% 10% The amount of times I trade in the stock market 12% 23% 38% 17% 10% Time spent analysing portfolio 16% 31% 32% 13% 9% Likelihood that I would switch fund manager 10% 19% 47% 15% 9% Likelihood that I would switch bank 10% 16% 47% 16% 11% Level of risk in portfolio 9% 18% 37% 23% 12% 0 10 20 30 40 50 60 70 80 90 100 Significant increase Small increase No change Small decrease Significant decrease Graph 3 - Respondents aged under 50 Allocation of my existing investments to cash 15% 36% 31% 11% 7% The amount of times I trade in the stock market 14% 28% 35% 16% 8% Time spent analysing portfolio 19% 34% 31% 11% 5% Likelihood that I would switch fund manager 9% 24% 49% 13% 5% Likelihood that I would switch bank 8% 21% 52% 12% 6% Level of risk in portfolio 10% 30% 30% 22% 8% 0 10 20 30 40 50 60 70 80 90 100 Significant increase Small increase No change Small decrease Significant decrease8
  11. 11. Property ladderGlobal property markets are currently a tale of two The variation in performance of house prices aroundtrends: drops in average house prices in countries such the world is reflected in survey respondents’ appetite foras the US, UK, Spain and Ireland, but continued increasing their allocation to property. Respondentsincreases in many Asian and Eastern European from key emerging markets (BRIC countries plus N11)economies. In the year prior to April 2008, the US house are considerably more likely to say that they plan toindex compiled by the Office of Federal Housing increase allocation to property than those fromEnterprise Oversight has fallen by around 5 per cent, developed, OECD countries. Nearly half (48 per cent) ofalthough drops in states such as California, Nevada and respondents from emerging markets say that they planFlorida are considerably higher. Meanwhile, house to increase allocation to property (including their ownprices in the UK have fallen by 3.8 per cent on an residence) compared with 37 per cent of respondentsannualised basis between May 2007 and May 2008. from OECD countries.Other regions, however, have fared far better. According This partly reflects strong positive sentiment in futureto the Global House Price Index from Knight Frank, the house price growth, but also a relative lack of depth inproperty consultants, Singapore and Hong Kong financial markets for some of these emerging marketenjoyed 29.9 per cent and 28.8 per cent annual growth countries. With fewer choices than their developedin the year to the first quarter of 2008, while Russia country peers, emerging market investors inevitablygrew by 21.7 per cent and China by 11.7 per cent. have strong weightings towards property. In the next year, how do you expect your percentage allocation to the following asset classes to change?Graph 4 - Respondents from OECD countries Domestic stocks 24% 54% 22% Overseas stocks 40% 45% 15% Bonds 26% 59% 15% Cash 28% 47% 25% Currency 22% 57% 21% Commodities (e.g. gold) 33% 52% 15% Property (including property in which you live) 37% 46% 17% Alternative investments 24% 59% 17% (such as hedge funds, private equity) 0 10 20 30 40 50 60 70 80 90 100 Greater No change Smaller 9
  12. 12. In the next year, how do you expect your percentage allocation to the following asset classes to change? Graph 5 - Respondents from BRIC and N11 countries Domestic Stocks 35% 43% 22% Overseas stocks 36% 46% 18% Bonds 27% 56% 17% Cash 27% 49% 24% Currency 27% 53% 20% Commodities (e.g. gold) 40% 45% 15% Property (including property in which you live) 48% 38% 15% Alternative investments 29% 51% 20% (such as hedge funds, private equity) 0 10 20 30 40 50 60 70 80 90 100 Greater No change Smaller A slightly more varied picture emerges when looking at expected property allocation in the US is greater than in the individual countries in the survey where countries such as the UK may reflect optimism that the respondents are most likely to increase allocation to tide will turn in the next couple of years, or that property. Here, China and India lead the field, followed attractive valuations make for good long-term by Singapore, which continues to experience strong investment opportunities. property price growth. The UK, Germany and Spain are the least likely to increase allocation to property, no doubt reflecting concerns in those countries about the prospects for property prices in the short term. The US, where house price falls have been occurring for a longer time, ranks in the middle of the list. The fact that10
  13. 13. Graph 6 - Per cent who will increase allocation to property in next 12 months by country China 57% India 48% Singapore 45% Monaco 45% Canada 42% Australia 39% Hong Kong 39%United States of America 37% Switzerland 37% UAE 36% Italy 33% Japan 33% Germany 33% Spain 33% United Kingdom 32% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%Liam Bailey, Head of Residential Research at Knight Frank, overstretched” he says, “But over the longer-term, wepoints out that property needs to be viewed differently believe that there is room for investors to increase theirfrom other asset classes. “It’s hard to look at property in exposure to property, both in terms of its value forthe same way as other asset classes because residential diversification and generally as an asset class.”property is not evaluated purely in terms of financialreturns,” he says. “Many wealthy people also use their He adds that once people have decided to invest inproperties for their own personal use. They are part of property, there are other questions to be addressed.their own personal consumption and only partially looked “It’s a complex area. Exposure to property can beat in terms of investment.” achieved in many different ways, such as owning a property directly, through a property fund, or byAccording to Mark Kibblewhite, Managing Director purchasing shares in a property company. However, oneof Barclays Wealth, property has become a more needs to be careful – you can get the asset class rightimportant part of wealthy individuals’ portfolios in recent but fail to express your view in the optimal way.”years due to its diversification possibilities. “In theshort-term, the property market is in a down-cycleand there is broad agreement that prices have been 11
  14. 14. 12
  15. 15. “Many wealthy people also use their properties for their own personal use. They are part of their own personal consumption and only partially looked at in terms of investment.” Liam Bailey, Head of Residential Research, Knight Frank 13
  16. 16. Changing times The survey suggests that some investors will take even In a period of increased economic volatility, what more direct action in response to market upheaval than change would you expect to make to the following? tweaking their asset allocation – many would even go as far as switching their financial adviser or bank. Just under Table 2 - Per cent that would be more likely to one-third of wealthy individuals say that they would switch fund manager by country respond to financial volatility by increasing the likelihood of changing their financial adviser, while 28 per cent say Country Per cent that they would be more likely to switch their bank. UAE 48 While there may be cases where this response is appropriate, it is not always a rational one. “Switching Italy 44 brokers after a period of economic volatility is a bit like Monaco 41 blaming the weatherman when the weather is not good,” Spain 37 says Terrance Odean, Professor of Banking and Finance, Japan 36 Haas School of Business, University of California, Berkeley. “In saying ‘the market has been performing lousy lately so Singapore 35 I will change broker’, investors are indulging in magical India 32 thinking. It’s another thing, however, if the broker has Canada 31 been clearly underperforming consistently.” Germany 31 This point underscores an important difference. In Hong Kong 29 some cases, investors will have clear communication UK 28 with their adviser about the available choices and risk Switzerland 28 involved, and the portfolio selected will reflect the investor’s needs. If the portfolio fails to meet China 27 expectations because of adverse market movements, Australia 24 and if the investor was made fully aware of the risks, USA 23 it may not be rational to switch fund manager in these circumstances. This is different from a scenario where investors have a genuine complaint about how their affairs have been managed, relative to the mandate they gave. If the wrong investments have been selected on the basis of that mandate, or if the risks have been poorly explained, or if the fund manager has failed to react to the changing market environment, then investors may be more justified in deciding to select a new provider.14
  17. 17. Among respondents to the survey, wealthy investors In a period of increased economic volatility, whatfrom the UAE are most likely to consider switching their change would you expect to make to the following?fund manager in response to volatility, while those fromthe US are least likely. “In recent years, the wealthy in Table 3 - Per cent that would increase level of riskthe UAE have become more discriminating and in their portfolio by countrydemanding in their expectations about performance,”says Sandy Shipton, Executive Director of Wealth Country Per centManagement at the Dubai International Financial Centre.“They expect higher than average levels of investment UAE 43performance and service and that’s probably why manywould take action in the face of volatility.” China 41 India 40Respondents from the UAE are also most likely to Singapore 39increase the level of risk in their portfolio in response Monaco 37to volatility, followed by investors from India and China.With these economies all growing at a rapid rate, Switzerland 37investors may reason that a time of volatility is also USA 36one of opportunity. Japan 35 Hong Kong 34 Germany 33 Canada 32 Australia 31 Spain 29 UK 29 Italy 27 15
  18. 18. The art of monitoring A volatile market environment may cause some investors to retreat into cash or seek out a new adviser but, more generally, it also leads to differences in the way individuals monitor their portfolio. According to the survey, just over half of respondents say they would respond to increased periods of volatility by spending more time analysing their portfolio. With investors enduring a roller-coaster ride of falling “We do see quite a lot of what you might call an and rising asset prices, it is perhaps unsurprising that individual investment focus, where investors can some pay more attention to performance and check become preoccupied with the performance of various aspects of their portfolio on a more regular individual investments, more than the overall portfolio,” basis. Such behaviour, however, does not always lead says Mr Jaecklin. “Investors can get upset around to optimal results. volatility in a sub-account while not really thinking about the aggregate volatility of the portfolio.” This “If you pay too much attention and monitor too often, focus on the performance of specific assets is a you may trade too much. Too much information can common problem among investors, and can cause lead to people being overconfident, which in turn can them to take decisions that may make sense when result in excessive trading,” says Professor Odean. considered on the basis of a specific asset, but are less rational in the context of the overall portfolio. According to the survey, 71 per cent of wealthy individuals monitor their overall portfolio at least monthly, while 41 per cent monitor their portfolio either weekly or daily. In general, respondents monitor the performance of specific stocks more regularly than their overall portfolio, with just over half monitoring this aspect of their investment either weekly or daily.16
  19. 19. How frequently do you monitor the following aspects of your portfolio?Graph 7 - All respondents Overall performance 15% 26% 30% 20% 7% 2% Asset allocation 10% 18% 27% 29% 13% 4%Performance of specific asset classes 13% 21% 29% 24% 10% 3% Performance of specific stocks 24% 27% 24% 16% 6% 3% Property prices 9% 16% 24% 26% 17% 8% 0 10 20 30 40 50 60 70 80 90 100 Daily Weekly Monthly Quarterly Annually Less than annuallyAccording to Mr Davies, there is no right answer to the The art of monitoring is intimately linked to the topic offrequency of monitoring. “How frequently an individual benchmarks. The survey shows that some investorsmonitors their portfolio is linked to their level of benchmark against the market, while others benchmarkcomposure,” he says. “People who monitor daily often against absolute returns. People who monitor more tendhave what we could call low levels of composure to focus on relative benchmarks rather than absolutecompared with people who monitor annually. The ones. The more important monitoring and awarenessresearch shows that there is a wide range of monitoring are to an individual, the more it matters to them what thebehaviour. It’s an important dimension of an individual’s market is doing relative to their investment personality and can have a significant impacton many other areas of their financial behaviour.” Individuals’ perception of their own skills – and the extent to which they believe this has contributed to theirMr Davies cites the following example to illustrate success instead of pure luck – also determines andifferences in composure. If someone who held a investor’s approach to monitoring. For example, thediversified global equity and bond portfolio went to sleep survey indicates that those wealthy investors whoin January and woke up in June, there would be little attribute success to skills are more likely to monitor andchange in its overall value. But, if they had been following take risks. People who believe in their own skills, he adds,the market on a daily or weekly basis, they would have will not settle for second best and have a greaterendured a sequence of highs, lows, gut-wrenching enjoyment of making moves and sleepless nights. 17
  20. 20. In search of absolute returns Recent economic volatility has drawn wealthy investors’ attention to absolute return funds. Although definitions vary, these funds generally aim to achieve a consistent positive monthly return regardless of the performance of the financial markets. For wealthy people, an absolute return approach can of which have about the same long-term risk/return often correspond with an aspiration to protect the value trade-off but generate very different return paths over of their wealth in real terms. “Intuitively, absolute returns the life-cycle of the investments. Investors differ in a make a lot of sense to some wealthy people as their way that goes beyond how much risk someone is primary motivation is to maintain steady returns rather prepared to take.” than aim for exponential growth,” says Mr Kibblewhite. According to the survey, the way in which individuals This is not to say that absolute returns are necessarily monitor their portfolio is connected with their appetite related to slow and steady returns, or that they are by for absolute or market return portfolios, whether or not nature a low-risk investment strategy. Absolute returns they think about their investments explicitly in these can also encompass a much higher-risk strategy - the terms. The results suggest that people who are more key, however, is that they are designed to provide a aware of their investment performance and who smooth investment path or trajectory. monitor on a regular basis will naturally have a stronger market return focus and vice versa. The survey looked at wealthy individuals’ appetite and understanding of different measures of financial return, There is also a dynamic aspect to benchmarking, such as how their investments perform against each according to Mr Davies. “Quite rationally, if people are other, whether they assess the performance of their doing well, they tend to veer towards a market investments against that of the stock market or their benchmark and, if the market isn’t, they focus more on peers, and their reaction to market downturns and risks. an absolute benchmark,” he says. According to Mr Davies, the differing preferences One benefit of an absolute return approach is that it reflected in the survey answer a key question: why an encourages investors to exert self-control by fostering a individual might want either an absolute return portfolio longer-term view than is typical with a market-based or a market return portfolio or a blend of both. approach. By setting goals that are based over a longer period, investors who stick with an absolute return “These preferences are not driven by differences in risk approach are less likely to make interim decisions, based profile but by whether someone wants to choose on emotional responses to market events, which may smooth returns or the roller-coaster route,” he says. conflict with their own longer-term objectives. “You could, for example, have two portfolios: one a market return and one an absolute return portfolio, both18
  21. 21. The age ofinformationMajor investment decisions, such as increasingallocation to cash or switching fund manager,should never be taken lightly.While such responses may be more common during Too much information can, however, be a problem fortimes of financial upheaval, they can have a profound investors. Harvard psychologist Paul Andreassen hasimpact when asset prices are volatile and the conducted research that explores the impact ofperformance of fund managers is so uncertain. different levels of financial information on both investorAs much as possible, investors need to make decisions behaviour and levels of profitability. Two groups werefrom an informed position – both by ensuring that they given information about a stock that they were thenconsult appropriate advisers and by seeking out and asked to trade. One group received a steady flow ofdigesting information themselves. financial information, while the second group received only quarterly earnings releases. Mr Andreassen foundIndividuals have never had so much financial that the group with access to less information traded lessinformation at their fingertips. The amount of space frequently and made twice the profits of the high-dedicated to business coverage in traditional media has information group. It seems that the group with moreincreased dramatically and this is being challenged by information was more confident that all this data woulda rise in the proliferation of new media. Once upon a allow it to anticipate better the movements of the market.time, people were able to make money by acting uponinformation more quickly than others. Now, financialinformation travels around the world in nanoseconds,making it increasingly difficult to capitalise on first-moveradvantage. At the same time, individuals have a widerrange of sources of investment advice than ever before:from independent financial advisers to brokers, banksand other intermediaries. 19
  22. 22. Too much information may cause problems, but some Additional interesting findings emerge when we degree of information is essential. The Economist segment the responses by wealth. Intelligence Unit survey suggests that, for today’s Here, there is a noticeable trend that, as investors wealthy investor, there are three main categories of increase their wealth, they are considerably more likely financial information: personal relationships, such as to rely on professional advice, while the media, in friends, family and peer group; the media; and particular, becomes less important. The influence of professional advisers, such as private banks, business friends and family and peer group remains more or less advisers and brokers. In general, no single source of consistent across all wealth bands. information stands out as being particularly important for the respondents: most investors appear to consult a range of people before making a decision. Graph 8 - Which of the following sources of Graph 9 - Sources of investment advice when investment advice are most important to you? segmented by wealth Business adviser 33% Private bank Friends and family 33% The media 32% Business adviser Peer group 31% Specialist finance company 30% Peer group Private bank 27% Broker 24% Friends and family High-street bank 19% Family office 13% Media Other, please specify 4% 0 10 20 30 40 50 0 10 20 30 40 50 (All respondents) Assets between £500,000 and £1m Assets between £1m and £10m Assets between £10m and £30m Assets greater than £30m20
  23. 23. “Wealthier individuals tend to have more complex “The first level is mainly determined by culture, thefinancial needs and are more likely to seek out specialised second by sophistication [the perceived knowledge ofprofessional advisers,” says Mr Kibblewhite. “While many financial markets] and levels of wealth,” he says. “Thewealthy individuals are happy to use longstanding latter type of investor, as well as the wealthier ones,business advisers, accountants and lawyers, they tend to tend to be more involved in the management of theirsearch out the very best specialist advisers.” assets. They interact more frequently with their private banker as well as viewing their banker as a sparringWealthier individuals also tend to outsource the partner, rather than simply relying on them for advice.”planning of their investment decisions to specialistadvisers, according to Neil Beaton, Chief InvestmentOfficer within Deloitte’s Private Client Services group.“High-net worth individuals with assets of £10 million or “In general, there is no relationshipmore certainly read the financial newspapers avidly butwe find that the larger clients also tend to outsource between the willingness ofmore of their investment planning decisions,” he says. wealthy individuals in the UK to delegate and their self-perception“Wealthier individuals tend to have of financial expertise”more complex financial needs andare more likely to seek out However, Mr Davies says that this relationship between levels of delegation and financial sophistication is muchspecialised professional advisers” lower than conventionally assumed. “In general, there is no relationship between the willingness of wealthy individuals in the UK to delegate and their self-Mr Jaecklin of Oliver Wyman believes that there are two perception of financial expertise. This changes when welevels of delegation associated with wealthy individuals: look specifically at wealth management clients, who intaking the decision to place money with a wealth general have higher delegation scores. There is a slightmanager in the first place and the level of interaction tendency for those who think of themselves as havingmaintained thereafter. higher expertise to delegate less and be more involved with their financial decision-making.” 21
  24. 24. Gender differences There are also noticeable gender differences in relation A study from asset management firm Oppenheimer to sources of information used. Women tend to be less Funds explores this finding further. It found that women influenced by the media than men but are more likely to are three times more likely than their male counterparts turn to friends and family. Male respondents, however, to seek financial advice from people, whereas men rated the media as their most important source of prefer to trawl through financial publications. Even financial information. when men do seek financial advice, the study found that they still refer to the media and often wonder how certain articles would affect their portfolio. Which of the following sources of investment advice are important to you? Graph 10 - Male respondents Graph 11 - Female respondents The media 35% Friends and family 36% Business advisor 34% Business advisor 30% Peer group 32% Specialist finance company 27% Friends and family 32% Peer group 27% Specialist finance company 31% Private bank 26% Private bank 27% The media 25% Broker 25% High-street bank 24% High-street bank 18% Broker 22% Family office 10% Family office 19% Other, please specify 4% Other, please specify 1% 0 10 20 30 40 50 0 10 20 30 40 50 Media makes its mark Although it becomes less influential as wealth He adds, however, that sometimes there is too much increases, the media is clearly an important source of information for people to make decisions. “The flow of financial planning and investment information for the information is such that it is hard for non-professionals wealthy today. Indeed, both the Wall Street Journal and to make sense of it and act upon it. You also need to the Financial Times have clearly targeted the wealthy, bear in mind that, in many cases, when a piece of as have new publications like Portfolio magazine. More information appears in the financial press, it has already broadly, there has been a deepening financial coverage been acted upon by others. So the information doesn’t in the quality press. “In the past 10 years, the quality have the same value.” and depth of financial coverage in the mainstream press has improved enormously,” says Mr Kibblewhite.22
  25. 25. The media can lead to another common problem inthat investors may focus excessively on “attention- Online and on targetgrabbing stocks”. In a study conducted by ProfessorOdean in collaboration with Brad Barber, Professor in The online environment has become an importantFinance at UC Davis Graduate School of Management, source of information for the wealthy, according to aentitled ‘All that Glitters: The Effect of Attention and recent study of online behaviour in the US by theNews on the Buying Behaviour of Individual and Luxury Institute, which found that the wealthy tendInstitutional Investors’, it was found that investors tend to spend more time online than any otherto over-invest in well-publicised stocks whether the news demographic group. According to this research,is positive or negative, and regardless of whether the price almost three-quarters of wealthy consumers use theof the stock rises or falls. As long as there are newsworthy internet for researching and gathering business andevents of any kind related to those stocks, investors are financial information. Nearly half (46 per cent) ofmuch more likely to buy them than to sell them. wealthy people seek company news, followed by stock analysis and world business news.“So while you may pick up the A recent study by Cogent Research in the US foundinformation from the media and that, by enabling people to share content, personal opinions and insights, social media and onlineyour friends and family, the technology were having an increasing impact on wealthy investors’ attitudes and behaviours. Nearlyquestion of what you do with that two-thirds of the wealthy with investable assets of at least $100,000 say that online peer-generatedinformation when you have a content about personal investing and financerelationship with a bank or adviser influences their financial decisions. According to the Cogent research, 58 per cent of high net-worthis a different one” investors have increased investments, while more than one-third have reduced investments in aIt is important, however, to distinguish between the specific fund or company as a result of the onlinemedia as a source of information and its role as a opinions of their peers.stimulus to action. “You may get information from themedia, then turn to your private banker or otherfinancial adviser and ask what action they recommend,”says Mr Jaecklin. “So while you may pick up theinformation from the media and your friends and family,the question of what you do with that informationwhen you have a relationship with a bank or adviser is adifferent one.” Another issue for retail investors is thetime lag between receiving a new piece of informationand acting on it. Given the speed of markets and thecertainty that most institutional investors will bereacting almost instantly to new information, retailinvestors can find themselves at a disadvantage if theywait too long to respond.John Clemens, Managing Partner, Tulip FinancialResearch, echoes this point. “Although research suggeststhat many wealthy individuals claim to make decisionswithout recourse to their financial adviser, it is a grey areain terms of exactly how much input advisers have ontheir decisions and the degree to which individualsactually make the final decision themselves,” he says. 23
  26. 26. 24
  27. 27. ‘ Given the speed of markets and the certainty that most institutional investors will be reacting almost instantly to new information, retail investors can find themselves at a disadvantage if they wait too long to respond’ 25
  28. 28. Knowledge and understanding Delegation and the use of external sources of advice – whether personal or professional – are important indicators of investor motivation and behaviour, but so too is the level of sophistication and knowledge that individuals possess themselves. There is a difference, of course, between real levels of market performance from performance based on the knowledge, and perceived levels of knowledge. In a investor’s ability. Of course, the recent difficult market famous experiment conducted by the Swedish conditions have probably corrected this bias.” This researcher Ola Svenson, it was found that 80 per cent phenomenon of attributing success purely to skill is one of respondents who were questioned for a survey rated that is captured well in the old Wall Street adage: “Don’t themselves in the top 30 per cent of all drivers. In a confuse brains with a bull market.” similar experiment, the majority of US college students responded to researchers that they considered The survey asked wealthy investors to rate their themselves to be “more popular than average”. knowledge of a number of key aspects of finance in comparison with that of other people. Overall, “Overconfidence of at least three different types has been respondents did not rate themselves excessively highly. reliably shown to be ubiquitous – the most pertinent here Indeed, in no single aspect of finance did more than half being the “better than average effect” whereby people of the total set of respondents rate their knowledge as have a strong tendency to think their knowledge is better being better than that of their peers. than average when it’s not,” says Mr Davies. The chart opposite shows an aggregate confidence Investors may also become overconfident when markets score, derived by adding the percentage of respondents are performing well – attributing their success to skill who think they have above average knowledge to those rather than market factors. “Over the past few years, we who report average knowledge, and then subtracting have seen some clear signs of pro-cyclical investment the proportion of respondents who consider that they behaviour – investment that is momentum-driven,” says have worse than average knowledge. Mr Jaecklin. “If the market is going up, then investors think that they are doing a good job and should invest more. This is clearly linked to the difficulty in separating26
  29. 29. Compared with other people, how would you rate your knowledge of the following aspects of finance?Graph 12 - Aggregate confidence score in comparison with peersInvesting in domestic equities 65% Tax issues 55% Bonds 52% Private equity 50% Pensions issues 49% Estate planning 48%Investing in overseas equities 43% Derivatives 42% Hedge Funds 33% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%In general, it is clear that respondents feel most The survey finds that US respondents, in particular, areconfident in their knowledge of domestic equities. likely to increase their allocation to overseas equities,This is not surprising, given that investors will be most perhaps reflecting concerns about the expectedfamiliar with companies headquartered in their own performance of their own domestic markets. Indeed, UScountry of residence and that the local media is likely respondents are also least likely to increase allocation toto cover these organisations in greater detail than domestic stocks.overseas companies.What is perhaps more surprising is the lack ofconfidence that investors display in their knowledge ofoverseas equities. Overall, they rate their knowledge ofthis aspect of finance as being on a par with theirknowledge of derivatives – a far more complexproposition with which only a small proportion of high-net worth investors will be fully conversant. Whileoverseas equities will be less familiar to investors,allocation to this asset class is an important componentof diversification, especially during times of volatility. 27
  30. 30. In the next year, how do you expect your percentage allocation to the following asset classes to change? Table 4 - Per cent that would increase allocation Table 5 - Per cent that would increase allocation to domestic stocks to overseas stocks Domestic stocks Per cent Overseas stocks Per cent Germany 37 Monaco 46 India 34 USA 44 China 32 Japan 42 UAE 31 Spain 40 Spain 28 UK 40 Singapore 27 China 39 Monaco 27 UAE 39 Switzerland 26 Switzerland 38 UK 25 Canada 38 Hong Kong 25 Italy 38 Canada 21 Germany 37 Japan 21 Singapore 36 USA 20 India 33 Italy 13 Hong Kong 31 Staying close to home The fact that investors lack knowledge of overseas According to standard financial theory, investors equities is likely, in part, to reflect a phenomenon known should invest in domestic equities in proportion to as home bias, which is the tendency to prefer their country’s share of world stock market investments that are more familiar and close to home. capitalisation. Investors all over the world, however, Home bias leads investors to over-invest in domestic tend to show a significant bias towards investing in equities, relative to foreign equities, despite the their own domestic equity market. One research study diversification benefits of including the latter in their from the 1980s showed that Swedish investors, for portfolios. By investing in foreign equities as well as example, invested nearly exclusively in their domestic domestic, investors can spread their risk, whereas stock market, although Sweden’s market capitalisation excluding foreign equities results in a concentrated, at the time was about one per cent of the total world and therefore inefficient, portfolio. market value of equities. Similar results have been found in many other markets.28
  31. 31. Home bias has long been explained by the notion that John Clemens of Tulip Financial Research believes that alocal investors have “informational advantage” with home, or familiarity bias, is widespread in the UK, andrespect to their own domestic equities. But a recent the bias is not just towards UK equities. “We see thatsurvey of 234 German equity and bond managers found wealthy individuals have a disproportionate tendency tothat local investors did not have any such informational invest in familiar investments. The FTSE 100, foradvantage. Rather than relying on locally available data example, is a big favourite. Just being quoted on thesources for investment decisions, investors relied on FTSE seems to provide some familiarity for manyindustry opinion leaders, whose views were widely wealthy investors. In the past couple of years, we haveavailable domestically and internationally. seen an increased appetite among the wealthy to invest in international equities to diversify their portfolio. ButMr Davies argues that a small amount of home bias is many were disappointed with their performance duringactually quite reasonable. “It makes people more the ongoing credit problems and have sold stock andcomfortable,” he says. “But beyond a certain level, invested in the UK market instead.”investors don’t realise how much not having a properlydiversified portfolio can cost them.” In other words,individuals may derive some degree of reassurancefrom the more familiar elements of their portfolio, andmay be prepared to sacrifice some degree ofperformance in return for that familiarity. It is key,however, that investors are made aware of the pricethat they are paying. Moreover, this reliance on familiarinvestments can become a bias rather than a consciousdecision if it goes beyond a certain point.A sophisticated asset classThe aspect of finance in which respondents profess least Oliver Wyman’s Mr Jaecklin, however, warns that theknowledge is hedge funds. “In our experience, the credit crisis may have changed the way some investorsindividual level of knowledge of what hedge funds are see hedge funds. “Many wealthy investors haveand what they are designed to do is actually quite poor,” discovered that hedge funds are not liquid asset classessays Deloitte’s Neil Beaton. “Many wealthy individuals and that you can’t liquefy these assets immediately,” heassume automatically that hedge funds are more risky says. “Part of the value proposition is that you capturethan long-only funds, and that is not necessarily true.” an illiquidity premium as part of your return. Although some investors did not seem to understand this, theyBarclays Wealth’s Mark Kibblewhite believes that the will have learnt by now.”current market conditions have also helped to educatewealthy investors as to the benefits of hedge fundinvestments. “The recent market volatility and downturnhave made many wealthy investors more aware of theattractions of absolute return portfolios [funds that aimto achieve constant positive monthly returns regardlessof market conditions],” he says. “Market conditions haveallowed us to educate clients to understand the benefitsof absolute return portfolios.” 29
  32. 32. The gender gap Comparing perceptions of knowledge across the appears equally poor) and pensions issues. The greater genders yields some interesting results: overall, women longevity of women is likely to play some part in their feel less confident than men in their relative financial relatively high knowledge of pensions issues. With knowledge across every aspect of finance. The gap in women living on average three years longer than men, perceived knowledge is widest in the case of equities – and with their life expectancy increasing all the time, both domestic and overseas – and narrowest in the case planning for retirement is one aspect of finance that has of hedge funds (where the knowledge of both genders become absolutely essential for them. Compared with other people, how would you rate your knowledge of the following aspects of finance? Graph 13 - Knowledge levels between men and women 71% Investing in domestic equities 49% 58% Tax issues 48% 56% Bonds 39% 54% Private equity 40% 50% Pensions issues 46% 53% Estate planning 36% 47% Investing in overseas equities 30% 44% Derivatives 37% 34% Hedge funds 31% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Men Women Historical evidence has shown that women’s lack of Clearly, however, there is much to suggest that this confidence in financial issues stems in large part from trend is changing. The gap between the wealth held by their relatively recent participation in the management male and female high net worth individuals is of money. In a 2006 study on gender differences in narrowing, and the number of women occupying top investment behaviour, carried out by the NASD Investor positions in business, finance and government swelling. Education Foundation, female respondents reported One impact of this is growing confidence in financial feeling less confident than men about their current and issues among women and a new generation of highly future financial situations. financially astute female investors.30
  33. 33. Regional and asset variations Compared with other people, how would you rate your knowledge of the following aspects of finance?Graph 14 - Aggregate confidence score in comparison with peers 72%Investing in domestic equities 59% 66% 64% Tax issues 51% 53% 60% Bonds 51% 49% 48% Private equity 49% 52% 54% Pensions 48% 48% 57% Estate planning 41% 51% 62%Investing in overseas equities 35% 41% 53% Derivatives 38% 41% 39% Hedge funds 29% 34% 0 10 20 30 40 50 60 70 80 North America Europe Asia 31
  34. 34. Filtering the data by the three main global regions of through business so understand the world of business North America, Europe and Asia-Pacific, the most very well, which in many ways is actually what private confident investors are almost without exception from equity is.” North America. In some cases, such as with investing in overseas equities, the gap is considerable. The only Wealth bands also have an impact on levels of exception to this rule is in the case of private equity, confidence in financial knowledge – the wealthier where respondents from Asia-Pacific express the individuals are, the more secure they seem to be. greatest confidence. Respondents with assets of £10 million and more display a heightened sense of their financial understanding “Most of the wealthy in Asia are actually first-generation compared to those with assets below that threshold in wealthy,” says Roman Scott, Managing Director of every aspect of finance. The biggest differences in Singapore-based investment management firm knowledge between the two wealth bands are related to Calamander Group. “They have made their own money investing in hedge funds, bonds and overseas equities. Compared with other people, how would you rate your knowledge of the following aspects of finance? Graph 15 - Aggregate confidence score in comparison with peers 71% Investing in domestic equities 64% 66% Tax issues 53% 66% Bonds 49% 60% Private equity 48% 58% Pensions issues 47% 56% Estate planning 46% 57% Investing in overseas equities 40% 55% Derivatives 40% 51% Hedge funds 30% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% More than £10m Less than £10m32
  35. 35. ConclusionIn times of volatility, when investor responses can become exaggerated andsometimes sub-optimal, the importance of understanding the psychological andemotional factors that influence the investment decision-making process is greaterthan ever. By contextualising these responses, and creating a picture of investorsbased on their attitudes to risk, performance, objectives and other measures,behavioural finance is helping to create tailored portfolios that match thepsychological profile of each individual.The survey reveals that wealthy investors react to Although investors vary widely in the extent to whichvolatility in a variety of different ways. Common they will delegate financial decisions, some degree ofresponses include an increased allocation to cash, personal knowledge about the financial world is vital.greater scrutiny of investment performance and the The wide range of options that are available to wealthyselection of new financial advisers. While in some investors, as well as the rapid rate of financialcases these responses may be appropriate, investors innovation, means that keeping up with trends can be aneed to be careful to avoid hasty reactions that may challenge, especially with some of the more exoticprove counter-productive or detrimental to financial instruments and asset classes. However, withperformance over the long-term. investors around the world facing a highly volatile market environment, it is clear that knowledge, reliableThe need for reliable financial information is never advice and an awareness of the impact of behaviour ongreater than during times of market uncertainty. While the decision-making process are among the mostwealthy investors typically consult a range of different powerful tools that they have in their arsenal.sources, it is clear that professional advice becomesmore important with increasing wealth, and whilesources of information such as the media are stillimportant, they decline somewhat in significance. 33
  36. 36. Methodology Written by the Economist Intelligence Unit (EIU) on behalf £10 million in investable assets) and ultra high net worth of Barclays Wealth, the report examines the choices that individuals (with up to and in excess of £30 million in wealthy investors make – especially during periods of investable assets) and a series of in-depth interviews greater volatility – and explores the characteristics that with experts on wealth and investment behaviour. determine why they are making those choices. Please note that in some cases percentages used in the It is based on two main strands of research: a global report may not equal 100, as survey participants were survey of more than 2,300 mass-affluent (with up to £1 asked to select three choices. million in investable assets), high net worth (with up to Survey demographic The 2,300 respondents were recruited from EIU respondents were generated from elsewhere in the databases of individuals around the world. world (30 per cent North America; 30 per cent Europe; The survey was undertaken between March and April 30 per cent Asia-Pacific; 5 per cent Latin America; 3 per 2008 by the EIU. cent Middle East; 2 per cent Africa). Geography: Canada, the United Arab Emirates, Hong Net worth: 40 per cent between £500,000 and £1 Kong, India, Monaco, Spain, Singapore, Switzerland, the million in investable assets; 40 per cent between £1 United Kingdom and United States were each million to £10 million; 10 per cent between £10 million to represented by 100 respondents. Additional £20 million; and 10 per cent have more than £30 million. Legal note Whilst every effort has been taken to verify the This document is intended solely for informational accuracy of this information, neither the Economist purposes, and is not intended to be a solicitation or Intelligence Unit Ltd. nor Barclays Wealth can accept offer, or recommendation to acquire or dispose of any any responsibility or liability for reliance by any person investment or to engage in any other transaction, or to on this report or any of the information, opinions or provide any investment advice or service. conclusions set out in the report. Contact us For more information or to be involved in the next report email Tel. 0800 851 851 or dial internationally +44 (0)141 352 3952 www.barclayswealth.com34