Wealthy Americans Are Prioritizing Protecting Assets And Limiting Personal Taxes

Protecting assets and minimizing tax liabilities are the top priorities of wealthy Wall Street Journal and Barron’s Group readers, according to a recent personal finance study conducted by WSJ Intelligence.

Around 57% of the more than 3,600 respondents—who had an average net worth of just over US$3 million—said growing and protecting their wealth is their No. 1 priority going into 2024, the data showed. That stands to reason, as 55% of readers were most concerned about inflation and the rising cost of living, while 40% reported that market volatility was their biggest issue.

About 81% of participants were male, with 3,280 of them being over age 55—aka, Baby Boomers. The combined total of Millennial and Gen X respondents was 333. Across wealth bands, the largest number of participants—1,656—were high-net-worth individuals with assets between US$1 million and US$9.9 million, followed by 718 “emerging affluent” respondents (with a net worth of less than US$1 million) and 253 ultra-high-net-worth individuals, with assets of US$10 million or more.

“This study was really to understand the behavior of our financially savvy readers and explore how they improve their financial acumen and make informed investment decisions,” says Donna Zeolla, the associate director of Finance Intelligence for the Wall Street Journal and Barron’s Group.

Certain concerns are unique to those in the highest income bracket, the survey found. For example, members of that group are 22% more likely to be concerned about identity theft and financial fraud than emerging affluents, the data showed. Zeolla said that was a surprise, given how rampant it can be.

The wealthiest are also 28% more likely to be worried about cybersecurity risks in digital banking and three times more likely to be concerned with estate planning and inheritance, according to the report. They are looking to educate themselves on tax planning, private banking, and estate planning—and in turn seeking out content that helps them do that.

Survey participants across wealth bands use a variety of wealth management services, including brokerage, tax and estate-planning services. When selecting an investing company, key considerations are the fee and commissions charged (49%), expertise (44%), customer service (38%), and the company’s reputation (36%), the figures showed.

“Every survey we’ve done here, at least for the 18 years I’ve been here, it’s the same things that they’re looking for in the institutions,” Zeolla says. “They look at fees, right? I don’t care if you’re the wealthiest person, you’re looking at the fees…[and] they look at the trust and the reputation of the companies. That’s always on their minds.”

And while many are loyal to their financial institutions, the richest investors are more open to switching. Only 41% of ultra-high-net-worth individuals wouldn’t consider moving their money to a new company, versus 53% of high-net-worth individuals and 49% of the emerging affluent.

“Wealthier individuals use a variety of different services—they don’t just have one institution that they’re working with, they’re working with many,” Zeolla says. “But what we did find was that the wealthier people were, the more that they’re open for change. It could be because they’re not loyal to one institution.”

Other differences included their preferred credit cards—the wealthiest were concerned about foreign-transaction fees while low interest rates were more important to younger respondents—and the richest also craved the personal touch. About 47% of ultra-high-net-worth individuals don’t use an automatic investing service because it doesn’t cater to their needs vs. 27% of the emerging affluent.