Economic Woes Haven't Yet Dented Wealthy Americans' Spending Aims – Study

Editorial Staff

16 December 2022

High net worth and ultra-HNW Americans aren’t planning to cut spending significantly in 2023 despite economic storms, a survey from Clarfeld | Citizens Private Wealth has found.

The study was based on a poll of 200 people across the US.

A majority of those interviewed plan to spend the same amount or more . Respondents indicated that they are most likely to allocate additional resources to travel , their businesses and/or franchises and real estate in the new year.

Additionally, 87 per cent think that the US is in, or will soon enter, a recession. Respondents cited inflation , market volatility and rising interest rates as factors that will have the greatest negative impact on their financial portfolios.

“Wealthy Americans have more tools at their disposal to ride out a recessionary environment, but they're not immune to volatility,” Matt Ruffalo, head of investment solutions, Clarfeld | Citizens Private Wealth said. “The biggest planning priority for wealthy investors in 2023 should be to ensure one’s portfolio allocations and savings strategies are prepared to weather both short- and long-term headwinds.”

Most respondents plan to make changes to their portfolio allocations in 2023, increasing and decreasing allocations to meet their goals. The three asset classes where respondents plan to increase their investments the most include equities , fixed income and cash . Respondents plan to cut allocations to cash , leverage or debt financing and equities in the year ahead.

In addition to overall allocation changes, the top financial tools Americans plan to use in 2023 include real estate investment trusts, or REITs , revocable trusts , non-revocable trusts and spousal lifetime access trusts . Additionally, 40 per cent of respondents said they want to invest in alternatives next year. This interest was highest amongst Millennials , compared with their Gen X and Boomer counterparts, at 52 per cent and 29 per cent, respectively.

Some 72 per cent of respondents said they plan to make a charitable donation at the end of the year. The primary reason for donating is altruistic, as 78 per cent are giving as part of their regular charitable giving. The tax benefits of giving also motivate 41 per cent of respondents to donate this year.

Fewer respondents plan to give a financial gift to the next generation this holiday season. Of those who do plan to give, 62 per cent plan to gift a trust or contribution to a trust, 45 per cent plan to make a charitable donation in their name, 35 per cent plan to gift shares of stock and 25 per cent plan to gift NFTs/digital assets.