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Featured Advisor

Srbo Radisavljevic
Managing Principal/Investment Advisor

Edge Portfolio Management


State: IL

At Edge, a low client to advisor ratio allows for personal and customized service for each individual.  Our goal is to work as a team for each client to provide not only portfolio management but wealth coordination and financial planning.  We make every effort to have frequent communication with our clients and to provide timely response to calls and emails.  I also enjoy spending time with my wife and three kids, following Chicago sports, enjoying ethnic cooking, and serving as a school board member for Norridge School District 80.

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For Wealthier Households, the Thrill is Gone from Investment Management

How has the rebounding market impacted investment attitudes?

The economic downturn seems to have taken something of a psychological toll on Millionaire and Ultra High Net Worth investors who express less willingness to be actively involved in the day-to-day management of their investments. They may still do it, but that doesn’t mean their heart is completely in it.

Just less than half (47 percent) of investors with a net worth between $1 million and $4.9 million (not including primary residence) like to be actively involved in the daily management of their portfolios, according to new research by the Spectrem Group. This is down considerably from the last two years. In 2009, 69 percent said they liked to be actively involved in the daily management of their investments. In 2010, 65 percent expressed this attitude.

During this time, Millionaire investors were perhaps shaken by the loss of their net worth and felt they needed to take a more active role in their money management. Spectrem estimates that Millionaire households saw their assets decline 30% during the economic downturn. Nearly one-fifth (17%) of millionaires absorbed declines greater than 40%. At the same time, nearly two-thirds said their investment advisers failed them during the global recession, a survey showed.

There has also been a precipitous drop in Millionaire investors who say they enjoy investing and would not like to give it up. Forty-five percent expressed this attitude according to Spectrem’s latest study.  In 2010 and 2009, 60 percent and 64 percent, respectively, said they enjoyed investing.

The oldest Millionaire investors ages 65 and up are the most likely to be hands-on in the daily management of their investments, but this age level, too, has cooled on the process. Half said they like to be actively involved, down from 68 percent in 2010.  They have also lost some of their enthusiasm for investing. Only 45 percent said it is something they would not want to give up, a 20 percent decline over 2010.

Younger Millionaire investors ages 54 and under, however, have taken the lead in their enjoyment of investing. At 47 percent, they are the most likely among the age levels to express this attitude. This is down only 6 percent from last year.

Waning enthusiasm for day-to-day portfolio management also extends to households with a net worth of up to $25 million (NIPR), but it is not as pronounced. Half of these investors like the process, down from 63 percent in 2010, while whereas last year 62 percent of Ultra High Net Worth investors (those with over $5 million net worth) said they enjoyed investing, this year finds that percentage reduced to 54 percent.

As was the case last year, age makes little difference on this wealth segment’s investment attitudes, but again, the number of those who say they enjoy investing and like to be involved in the day-to-day management of their portfolios has dropped, most significantly among those ages 55-64. This year, 51 percent said they liked to be actively involved in their investments as opposed to 72 percent who expressed this attitude last year.

No doubt investors buffeted by the economic downturn have struggled with a conflicting mix of emotions that can’t help but impact their investment attitudes. Some will remain entrenched and continue to handle their own money management. Others will turn to a financial advisor. And as this halting recovery continues, they may get their ardor back.