Investors Ride Covid Arc from Liquidity Panic to Nailing Down Legacy Plans
When the full force of the Covid-19 pandemic was becoming clear in March, UBS private wealth advisor Mark Wilkins’ high-net-worth clients were obsessing over liquidity.
Today, they want to discuss legacy planning.
Wilkins, who is ranked #5 on Forbes’ Best-In-Missouri wealth advisors list and generates about $4.8 million of annual revenue, outlined the trajectory of his client’s responses on a press call discussing UBS’s latest Investor Watch survey of more than 3,750 retail investors across 15 global markets.
The 25-year wirehouse veteran was able to calm most of his clients with assurances that their cash allocations will get them through even a long-lasting crisis.
That tracked the 82% of U.S. investors surveyed who both expect permanent lifestyle changes (less travel and office time, moving closer to family members and shifts away from urban centers), yet who say they have not been “significantly affected” by the pandemic.
Globally, 75% of respondents told UBS in the May survey that their lives will be permanently affected by the virus outbreak, while 25% said they have already been significantly affected. Fifty-six percent worry that they will run out of money if another pandemic emerges while 54% are concerned they will not leave enough money for the next generation.
Millennials were the largest group to express financial hurt from the pandemic (73% compared with 66% of baby boomers).
“The pandemic is causing many of them to rethink how they’ll fund their liquidity, longevity, and legacy needs,” UBS Americas President Tom Naratil said in a prepared statement about the overall investor sentiment. “That means wealth managers have an opportunity to play an even more important role in their clients’ lives and prepare them for the post-pandemic environment.”
Among the 3,750 investors who responded to UBS, 81% expect markets to decline while 79% see opportunities arising from the volatility.
Eighty-three percent of all investors want more guidance than usual from their financial advisor on their financial affairs, according to the survey.
For Wilkins, conversations have gone from pre-Covid standard discussions of investment opportunities to questions that he said really matter, such as “what is the impact we’re having on the world from an investment standpoint, and how are we expressing both our family values and our investment beliefs.”
His team also has benefited from its early promotion of investing in “all things sustainable,” he said about its adoption of investments using the environmental, social, and corporate governance (ESG) lenses that asset management firms have been developing. Millennials expressed the strongest interest in sustainable investing (69%) as opposed to 44% of boomers interested in the trend.
“The amount of referrals that our team is getting based upon our expertise around sustainable impact investing is pretty astounding,” Wilkins said, without elaborating on the business opportunities or client ages.
Survey respondents aged 40 or above had at least $1 million in investable assets, while those 31-39 had at least $500,000 and millennials aged 25-30 had to have at least $250,000 to participate. Almost 27% of the survey respondents live in the U.S.
In the U.S., more millennials (75%) and men (72%) said they have been hit hard by the pandemic than boomers (65%) and women (67%). But millennials also expressed the strongest interest (63%) in sustainable investing, while the strategy interested only 27% of boomers, according to UBS.