How have they got where they are today? What motivates them most and what drives their success? In short, we need to find the answers to these questions if we are to provide the best advice possible – and it requires more than scratching the surface to reveal such financial truths.
A recent survey by RBC Wealth Management and The Economist Intelligence Unit, Wealth Through the Prism of Culture and Mobility, goes some way to helping us understand this link between wealth and mobility. Through the survey we learn that seizing opportunity, embracing change, building connections and taking risks are attributes that fuel the success for internationally mobile wealthy individuals (IMWIs). Grasping the nettle on this means we are able to gain a better picture of their approach to business, attitude to investment as well as views on planning for retirement and providing for successive generations.
We can of course make an educated guess when it comes to this client base. For example, it’s likely that they will take a global view when it comes to their investments. The survey backs this up with over a third (36%) favouring global equities compared to 25% of their less mobile peers. Also, as many of us would predict for this sector, real estate comes out as the top asset class.
But dig a bit deeper and we come across some cultural differences. For example, while European IMWIs show a greater propensity to invest most of their assets outside their country of residence or origin (37%), as compared to their Asia-Pacific (10%) or North American (11%) mobile peers.
And while most generate the majority of their income within their country of primary residence, over a fifth (23%) still derive most of their income from their country of origin and a small proportion (9%) derive it from a third country, according to the survey.
Again, large regional differences come into play here. A high 94% of IMWIs now living in the US derive most of their income from their country of residence, as do 80% of those in Canada. This contrasts with 63% of Western Europe-based IMWIs and 58% of those living in Asia-Pacific.
In terms of the correlation between age and success, nearly half of respondents (46%) in the Asia-Pacific region had grown wealthy aged 40 or under, compared to just 19% of those from other parts of the world. And it is the younger millionaires who are generating wealth through more diverse means, with just 17% of this group earning their wealth as professionals, compared over a quarter (26%) of those aged between 41-50 and 41% of those who are aged over 50.
As globalised economies converge and high net worth individuals increase their international footprints, it’s clear we need to start scratching below the surface to understand the evolving link between wealth, mobility and culture much better if we are to make a difference in terms of the financial advice we offer.
