The wealthy have always worn a mantle of mystery: their gated communities, private memberships, exclusive clubs and the like emphasizing this 'otherness.' Their investment management activities are no different; most high net worth investors employ a professional advisor to stand between them and the investment management hoi polloi who clamor to serve them.

Yet the wealthy share many of the same investment goals and objectives as institutions. They want returns balanced by reasonable risk, some form of income, long-range planning that fits their current and future anticipated needs, and diversification among assets. Wealthy investors are as suited for alternative asset allocations as the foundations, endowments, and institutions that have been actively investing in them for decades. But the strategies most successful in accessing the wealthy community require a different set of tactics. Data and analysis take a backseat to interaction and education when breaking through to the wealthy audience.

Follow the money

US Trust released a survey, Insights on Wealth and Worth, in late 2015, which revealed some interesting findings about these investors. The survey encompassed a cross section of 640 high-net-worth and ultra-high-net-worth adults with at least $3 million in investable assets, equally divided among those who have between $3 million and $5 million, $5 million and $10 million, and $10 million or more.

• First, 66% use some type of professional financial advisor such as a private banker, wealth manager, broker or financial planner, with about 25% relying on a private banker or wealth manager as their primary advisor.
• Second, among the two-thirds of the wealthy using a financial advisor, they are also notably more likely to be using non-traditional investments in their portfolios.
• Third, almost two-thirds of high-net-worth investors (62%) ......................

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  This article was published in Opalesque's New Managers a top-down monthly analysis, news and research publication on the global emerging manager space.