The professional market in the US represents some 3 million households, many of which have significant wealth, a new report from Spectrem Group says.

The professional market in the US represents some 3 million households, many of which have significant wealth, a new report from Spectrem Group says.

The report, which refers to doctors, dentists, lawyers and accountants, estimates that around 10 per cent of professionals fall in the $1 million - $5 million segment, while around 13 per cent fall in the $5 million - $25 million segment.

“According to the website Cha Cha there are about 700,000 physicians in the US and about 180,000 dentists. Add on top of that about 800,000 lawyers and over 1.3 million accountants and it becomes clear that these professionals represent a sizeable market,” says Spectrem.

Behavior, attitudes

One of the ways in which professionals differ from other wealthy individuals is that they tend to cite frugality and education as factors in their wealth creation, and are less likely to cite taking risk and smart investing as factors. Because of this background, the report says, professionals value high standards of training in their advisor, and will also have as a key goal the financing of education for their family members.

In terms of their broad concerns, professionals tend to worry about similar things to other millionaires and ultra-wealthy individuals: the national debt, the economic downturn and the political environment. However, between the two wealth segments, the ultra wealthy are much more concerned about taxes than millionaires (77 per cent versus 42 per cent), according to Spectrem.

“Many UHNW professionals are in or nearing retirement, therefore tax increases pose a greater impact on their overall lifestyle than for professionals who are still employed,” says the report.

Also – perhaps because they created their own wealth – they are often more worried about other family members’ finances than their own. Specifically, millionaires tend to be younger than UHNW professionals, and so just over half are worried about aging parents, while the majority of both wealthy and ultra-wealthy professionals fret about the finances of their children and grandchildren. Around half of both groups are also concerned about having someone to care for them in old age.

In terms of finances though, the majority of wealthy professionals – both millionaire and UHNW – expect to live comfortably during retirement. As they tend to be in different life stages, with millionaires on average younger than ultra-wealthy professionals, millionaires expect their lifestyle to improve – around half expect their financial position to be better in a year’s time. The ultra wealthy, however, are more concerned with protecting what they have.

Generally, professionals are more involved with world affairs and financial topics than other wealthy individuals, according to the report.

Advisor contact

According to Spectrem’s research, most ultra-wealthy professionals said they preferred monthly calls from their advisor while millionaires prefer less contact, with semi-annual calls being the most popular option. However, when it comes to returning inquiries, millionaires are much more demanding, with 33 per cent saying they expect an email response the next day, compared to 15 per cent of UHNW professionals.