Wealthy Americans express concerns about spoiling their kids and spending on non-essentials, PNC survey finds.
By Sonia B. McCormick
The recession has caused a significant number of America’s wealthy to re-evaluate their lifestyles, according to a survey by PNC Wealth Management, a member of The PNC Financial Services Group, Inc. (NYSE: PNC).
Four out of 10 (42 percent) say they have felt a negative impact on their family budget, with one-third (34 percent) experiencing a negative effect on their lifestyle, according to the sixth annual Wealth and Values Survey.
In addition, wealthy Americans have changed their views of what is important as a result of the recession, emphasizing living within their means, developing an appreciation for non-material aspects of their lives and re-evaluating priorities.
Nearly nine out of 10 (88 percent) believe it is more important than ever to live within their means and two-thirds (66 percent) believe they have developed a greater appreciation for the non-material wealth in my life. Half (50 percent) say they feel more centered because the recession has given them an opportunity to re-evaluate their priorities.
Also, concern over children becoming more spoiled has risen dramatically in the last two years. This years survey revealed that 35 percent believe that their children may be too spoiled by money and have too many material possessions, up from 22 percent in 2007.
Just over half (51 percent) believe the recession has changed the way their children will manage their finances and has prompted nearly half (47 percent) to discuss money management with their children.
For wealthy individuals, the recession has presented an ideal opportunity for a strategic analysis of their current lifestyle, said Steve Pappaterra, senior vice president and managing director of wealth planning for PNC Wealth Management. It is time to strip away the clutter, discern what is most important, and develop tangible action steps to ensure that key goals and dreams are accomplished and important values are passed on.
Pappaterra said those steps should include personal reflection and conversations with family to determine the redefined values and consulting with an advisor to facilitate a financial plan.
Spending Down, Too.
The survey of 1,046 wealthy Americans, all of whom have at least $500,000 in investible assets, also revealed that they have been impacted in other ways by the recession. Four in 10 (42 percent) have cut their spending on non-essential goods, while three in 10 (29 percent) have provided financial assistance for friends or family who need it.
Among the ultra-wealthy (those with $5 million or more in assets), 39 percent are more likely to have provided financial assistance to friends or family, compared to 26 percent of those with assets of $500,000 to $1 million.
The Wealth and Values Survey was commissioned by PNC to identify attitudes about wealth among high-net-worth individuals, how it affects their lives and their needs in managing wealth. The survey was conducted online within the United States by Harris Interactive in September and October 2009 among a nationwide cross section of 1,046 adults (age 18 or over) with annual incomes of $150,000 or above (if employed), at least $500,000 of investable assets (unless retired) or at least $1 million of investable assets (if retired). Findings are significant at the 95 percent confidence level with a margin of error of +/- 3.0 percent.
The survey was designed and managed by HNW, Inc. A leading provider of wealth marketing software and solutions to financial services companies and intermediaries seeking to capture and serve the high net worth market.
The survey was supported by Artemis Strategy Group. A communications strategy research firm specializing in brand positioning and policy issues.
The PNC Financial Services Group, Inc. is one of the nation’s largest diversified financial services organizations providing retail and business banking; specialized services for corporations and government entities, including corporate banking, real estate finance and asset-based lending; wealth management; asset management and global fund services.
This report has been prepared for general informational purposes only and is not intended as specific advice or recommendations. Information has been gathered from third party sources and has not been independently verified or accepted by The PNC Financial Services Group, Inc. PNC makes no representations or warranties as to the accuracy or completeness of the information, assumptions, analyses or conclusions presented in the report. PNC cannot be held responsible for any errors or misrepresentations contained in the report or in the information gathered from third party sources. Any reliance upon the information provided in the report is solely and exclusively at your own risk.