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High net worth

Which clients are living paycheck to paycheck?

ByLisa Joyce, Graison Dangor
June 3, 2019 2:32 AM
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One in four advisors say that half of their high-net-worth clients are living paycheck to paycheck, according to Financial Planning’s inaugural Financial Wellness Survey.

The study also revealed that, despite advisors’ attempts to teach the rudiments of smart saving, budgeting and long-term investing, clients are still saving too little for retirement and demonstrate a lack of basic money management skills. “Financial illiteracy is a plague that has infected the majority of Americans,” one planner said.

Scroll through to see how clients how clients are saving and investing depending on their assets and at each stage of life.

The Financial Wellness Report, published in partnership with ADP, is created by the editors of Financial Planning and is based on a survey of about 300 advisors in April and May 2019. Clients were segmented by age and investable assets: less affluent (less than $250,000), mass affluent ($250,000 to $999,999), HNW ($1 million to $9.9 million) and UHNW ($10 million and more).

clients not health insured

Less money, more coverage

It may surprise some to learn that clients with more wealth are less likely to purchase health insurance.
clients not life insured

Poor life (insurance) choices

As with health insurance, the wealthiest clients are also the most likely to not have life insurance, according to advisors.
investment types utilizing 25-34

Basic banking

More millennials put their money in checking accounts than any other age cohort, advisors say. Other low-yield options include savings accounts and health savings accounts. On the plus side, four in 10 clients in this age group are planning for retirement with 401(k)s, IRAs or 403(b)s.
investment types utilizing 35-49

Entering the market

This group prioritizes retirement savings more than its younger cohort, and also puts more aside in health savings accounts.
investment types utilizing 50-64

Retirement prep

Clients in their 50s and early 60s use 401(k)s, 403(b)s and other forms of retirement accounts more than any other age group surveyed.
investment types utilizing 65+

Saving and trading

As a group, senior clients are least likely to have a college savings plans and most likely to hold individual stocks and bonds in their portfolios.
investments utilizing by assets 250k or less

401(k) champions

Clients with relatively few assets — less than $250,000 — comprise the group most likely to have retirement accounts, with 88% using at least one. Nearly six in 10 have college savings plans.
investment types utilizing mass affluent

More to invest

Mass affluent clients are more widely invested in stocks, bonds, ETFs and direct investments than with less than $250,000 to invest. They are also less likely to have college savings plans and retirement accounts.
investment types utilizing high net worth

$10 million and up

Advisors' wealthiest clients are more than twice as likely to put their money in direct investments and several times more likely to invest in ETFs, than those with less than $250,000.
Lisa Joyce
Contributor, Financial Planning
Graison Dangor
Former associate editor, Financial Planning
High net worth Financial literacy Investment strategies Financial Wellness Report
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