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According to a Zippia study released earlier this year, there are roughly 22 millionaires in the U.S., or 8.8% of the population. The average millionaire is 57 years old and 33% are women.
Even with inflation, $1 million is still a lot of money and millionaire status is coveted, rarified air for those outside this exclusive club. Interestingly, those that are millionaires don’t view themselves. In fact, many consider themselves middle-class. Those are among the notable findings in a recent survey conducted by Ameriprise Financial.
Ameriprise surveyed 580 Americans ages 27-77 who currently have a million dollars or more in investable assets to understand how they built their savings,” according to the financial services provider. “Eighty percent cited ‘financial planning and investing’ as the top driver behind their ability to accumulate more than $1 million. They also said, ‘making a good income’ (71%) and ‘living within my means’ (69%) contributed to their financial success. Only 13 percent credited “luck” for their good fortune.”
That’s good news because much of the above confirms that those in the millionaire crowd see value in professional advice and, obviously, that’s a highly desirable client base. Still, it should be noted that “wealthy” and “rich” are often perceived to be different things.
Security, Wealth Mean Different Things to Different Clients
Clients want to feel wealth and they want security. Advisors also know that how clients perceive wealth and security often varies from one to the next. That’s not a bad, particularly not when there’s an evolving view of wealth – one that’s expanding well-beyond bottom-line financial concepts.
Regarding security, that too can take on many forms. However, there is some uniformity here. Many clients and those on the prospect list view financial security as being enhanced by more money, namely in the form of higher salaries. On the other hand, more money doesn’t always facilitate an improve perception of wealth.
“Six in ten (60%) investors with $1 million or more surveyed classify themselves as upper middle class, and an additional 31 percent say they are part of the middle class,” adds Ameriprise. “Only eight percent characterize themselves as wealthy. For comparison, a quarter (25%) of those with $25,000-$999,000 in investable assets say they are upper middle class, 58 percent say they are middle class and two percent say they are wealthy.”
Not surprisingly, what millionaires expect of advisors differs significantly further down the totem pole of affluence. Less affluent clients often want advisors to help get close to becoming millionaires. Obviously, millionaires are already there and have different needs.
“Investors with more than $1 million revealed that their top three financial priorities are ‘protecting accumulated wealth’ (62%), followed by “saving for retirement” (43%), and ‘managing market volatility’ (32%),” notes Ameriprise. “Comparatively, investors with under $1 million in assets said, ‘saving for retirement’ is their top priority (49%), with ‘managing day-to-day living expenses’ (42%) coming in second, and “increasing income” (35%) and ‘paying down debt’ (35%) tying for third.”
Millionaires Want Security
One thing is clear: Security is meaningful to millionaires.
“Millionaires want to protect their hard-earned wealth and they’re looking for peace of mind that they’re on track to reach their next financial goals,” said Marcy Keckler, Senior Vice President of Financial Advice Strategy at Ameriprise.. “It’s encouraging to see so many of them taking sound financial principles to heart. Investors at any life stage or wealth level can benefit from a comprehensive financial plan that accounts for their unique goals and the inevitable bumps in the road along the way.”
Acknowledging the above, it’s not a stretch to say that clients, regardless of tax bracket, that crave financial security are also likely to be receptive to working with advisors and that’s a good thing,