Almost 70 per cent of investors with over $1
million in investable assets do not regard themselves as wealthy, according to UBS’ latest Investor Watch report, which identified “living without financial constraints” to be the most
prevalent definition of wealth among respondents.

For over a decade, the $1 million figure for investable wealth has been treated as the starting point for defining what is a high net worth individual - although inflation has eroded that figure.

The general consensus among investors is that
it would take at least $5 million in personal wealth for them to feel wealthy,
rather than benchmarking this against a specific asset level. Only 10 per cent
define wealth as never having to work again, while a smaller percentage cite being able to afford a luxurious
lifestyle (9 per cent).

UBS Wealth Management Americas said one of the most surprising findings
of the report was that four in five investors provide financial support for adult
children or aging parents, which it added has an impact on the definition of a “comprehensive” financial plan.

The cost of healthcare and long-term care
remains the top personal concern among investors, as cited by 27 per cent, while their children’s
and grandchildren’s financial situations rank second (20 per cent), followed by
the ability to afford retirement (14 per cent), and the potential to outlive assets
(14 per cent). Highlighting how these views alter the definition of a “comprehensive” financial plan, UBS found that investor confidence soars to 85 per cent - versus
57 per cent with a more traditional financial plan - when plans are focused on long-term healthcare expenses and providing financial support
across multiple generations.

Adding to a number of previous studies illustrating differences in the wealth management perceptions and approaches among female and male family members, UBS' latest findings suggest that men are more likely than women to feel financially responsible for other generations within their family and exhibit "greater enjoyment" in doing so. Only 21 per cent of women said they feel responsible for the financial well-being of their grandchildren, for example, compared to 31 per cent of men. While a larger proportion of both men and women feel responsible for the financial well-being of their adult children and parents, this was again found to be more the case among men.

Meanwhile, the firm said it has seen
investors holding 23 per cent in cash on average over the past three years, allowing them to be more “aggressive” with other investments. Investors
are also “bucketing money” based on use, which makes them feel more in control
of investment risk, it added.  

“Investors are using significant cash
holdings as a type of ‘security blanket’ to give themselves peace of mind, but
also to allow them to feel comfortable getting out there and participating in
the market again,” said Emily
Pachuta, head of investor insights, UBS Wealth Management Americas.

For its fourth Investor Watch survey, UBS surveyed 4,450 investors between July 23 and July 1. Respondents were at least 25 years of age with $250,000 in investable assets; half had at least $1 million in investable assets. A total of 2,675 men and 1,775 women participated.