It bears saying: while the rich "may be different," the ultra-high-net-worth crowd are apparently no better than the rest of us when it comes to keeping their irrational impulses out of their portfolios.
A new SEI poll of investors with more than $5 million in liquid assets reveals that a full 68% have let their emotions get in the way of more objective factors in their investing decisions -- even when 83% admit that logic should trump "instinct" in the market.
Surprisingly, only 46% said their advisor was the top influence on their investment philosophy.
What can we take away from this? First, it remains crucial for these UHNW clients' advisors to remain a central, unbiased voice of reason -- or take on that role, if as yet they haven't done so.
Every investor is already well equipped with greed and fear. What he or she needs -- and what these big clients in particular will pay for -- is a second opinion to reinforce rebalancing and other disciplined approaches to the market.
Second, 54% of this population said that the best benchmark of investing success is achieving their goals and not simply hitting the biggest performance number. This in itself is something that's only really possible inside a robust advisor relationship -- and that, in itself, is the key to retaining these big clients.