The investment activities of the ultra wealthy are often used as a barometer for general investment trends. Because of the size of their assets, the ultra wealthy may have access to opportunities for better returns while also keeping taxes low and preserving assets.
The two trends make sense because of the low interest rate environment and the increasing threat of rising taxes after current laws expire at the end of the year.
Survey respondents had a minimum of $25 million in investible assets. Overall, these investors were putting 25% of their assets into alternatives, an increase of 50% over a five-year period.
Traditional assets have lost their luster in the ability to provide satisfactory returns. More than a quarter of survey respondents expect to make annual returns of 16% or greater, with 11% of respondents targeting 25% returns.
Sixty percent of respondents are investing in tax-free bonds to offset the expected tax rate hike. Forty-seven percent are increasing contributions to charity, 28% are investing in tax-advantaged life insurance products, and 24% are thinking about making a move to a state with no income tax at the state level.
The report highlights trends that you can target in serving clients with larger assets. The segment with between $10 million and $100 million is an underserved market. These results may show areas of expertise you can use to grow your business.


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