VOLUME FOUR
Targeting the
Millionaires Near You
SM
Summary of Findings
Inside
America’s millionaires—households with investable
assets of at least $1 million, excluding workplace retirement
accounts and any real estate—are not all the same across the
U.S., according to the Fidelity Millionaire OutlookSM survey.
Overview: Millionaires
by Geography
3
How Millionaires Differ
by Metropolitan Area
8
Detailed Profiles:
For example, a millionaire’s rationale for first hiring an advisor
New York
9
is just one of many regional distinctions among these
Chicago
10
wealthy investors. While millionaires in New York, Chicago,
Los Angeles
11
Dallas
12
and Atlanta most commonly establish their first advisor
Washington, D.C.
13
relationship based on a trusted recommendation from a
San Francisco
14
friend or colleague, those in Los Angeles and Boston reach
Atlanta
15
out to advisors based on reaching a certain wealth level.
Miami
16
Boston
17
This report offers insights into where millionaires live and how
Phoenix
18
they differ from each other in different parts of the country. A
Further Considerations
to Help You Strengthen
Client Relationships
19
close look at millionaires—by region, metropolitan area, and
zip code—reveals surprising differences among them. By
gaining a deeper understanding of millionaires in their own
area, financial advisors can help address their clients’ needs
and proactively provide the services and products they seek.
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Business-Building Insight from
Fidelity Investments
As the fourth in the Fidelity Millionaire
Outlook series, this report examines
where millionaires live and how they
are distinguished from each other in
different parts of the country, insight
that will help you:
■
Learn more about millionaires—
where they live, who they are,
and what they do
■
Understand how their investment
concerns vary geographically
■
Take action by targeting the
millionaires in a particular area.
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Why Geography Matters
Shared levels of wealth aside, millionaires are a diverse
The findings in this report are based on two surveys of
group. They differ in how they acquired their money,
U.S. millionaire households. The surveys, which did not
what they do with it, and what role they want to play in
identify Fidelity as the sponsor, were conducted online
managing it. These differences are based on personal,
by Burke, Inc., an independent firm, unaffiliated with
social, and cultural factors—all of which can vary by
Fidelity, that has been conducting research since 1931.
geography. This report showcases the geographic
The most recent survey was conducted in January 2008,
areas where U.S. millionaires are concentrated and
with completed responses from 1,000 financial decision-
profiles these millionaires by the areas in which they
makers in U.S. millionaire households. The margin of
live. These insights can help advisors identify areas to
error for that survey was +/– 3%. The previous survey was
focus on and can guide them in understanding how to
conducted in December 2006, with completed responses
approach millionaires in those areas.
from 2,507 financial decision-makers within U.S. millionaire
households. The margin of error for that survey was +/– 2%.
About the Fidelity Millionaire
OutlookSM Survey
Fidelity Investments (Fidelity) conducts regular surveys
About Millionaires
of U.S. households with investable assets of at least
More millionaires use Fidelity than any other financial
$1 million, excluding workplace retirement accounts
provider in the U.S.
and any real estate holdings. The research analyzes
The Fidelity Millionaire OutlookSM survey reveals that, of
millionaires’ attitudes and behaviors on a variety of
the respondents, Fidelity Investments is the No. 1 financial
investing topics, including financial concerns, use of
provider for U.S. millionaire households. Fidelity has the
financial advisors, and economic outlook.
highest penetration of U.S. millionaire households: 40%
with at least $1 million in investable assets (not including
workplace retirement accounts and any real estate) have
at least one account with Fidelity.
40%
FIDELITY INVESTMENTS
26%
BANK OF AMERICA
24%
VANGUARD
19%
CHARLES SCHWAB
18%
CITI SMITH BARNEY
16%
MERRILL LYNCH
15%
WACHOVIA
11%
WELLS FARGO
ING
11%
JPMORGAN CHASE
11%
E*TRADE FINANCIAL
11%
9%
TIAA-CREF
T. ROWE PRICE
8%
TD AMERITRADE
8%
UBS
8%
7%
MORGAN STANLEY
0%
5%
10%
15%
20%
25%
30%
35%
40%
Source: Fidelity Millionaire Outlook, January 2008
2
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Millionaires by Geography:
How Regions Distinguish Millionaires
Mary Jean Somerville
Prototype of a Southern Millionaire
Southern states (including Florida, Texas, and Georgia)
claim the highest number of millionaire households.
More than a third of millionaire households’ primary
residences are located in the South (see Figure 1).
Western states (including California and Arizona) rank
second in their number of millionaire households, with
the Midwest (including Illinois and Michigan) and the
Northeast (including New York and Massachusetts)
closely following suit. According to the survey, each
region’s millionaires exhibit unique characteristics:
Widowed at 55, Mary Jean had to quickly
immerse herself in something she had paid
little attention to over the years—her financial
affairs. When it came to finances, her husband
always took the lead, working with the same
trusted private banker for nearly 20 years.
Mary Jean is a Delegator.1 While she’s learned a
great deal about investing over the past three
years, Mary Jean still prefers to delegate most
investment decisions to her advisor. She feels
she has enough resources for a secure and
■
The South is where millionaires go to retire. Not surprisingly,
comfortable retirement and that her estate plan
given the region’s climate, Southern states are home to many
is in great shape. But recently her oldest son
retired millionaires. On average, Southern millionaires are 59
informed her of his plans to start a business,
years old and the majority (58%) are retired. Given their retiree
and Mary Jean would like to help him. Since
status, these millionaires have slightly lower incomes than those in
she knows this is an area in which her private
some other regions and earn that income from their investments,
banker lacks expertise, Mary Jean is seeking
with an average household income of $340,000 and investable
an independent advisor with specific business
assets of $4.1 million. Seven out of 10 use a financial advisor, with
advisory experience.
a greater percentage than many other regions’ millionaires (27%)
caring for a family member. Typically, Southern millionaires are
careful spenders and feel financially secure.
1
Millionaires differ in their investment decision-making styles.
“Delegators” hand over investment decisions and implementation
to others. “Validators” make decisions together with their advisors.
“Soloists” are do-it-yourselfers and use advisors to implement the
investment decisions they make on their own. See Fidelity Millionaire
Outlook series, volume three: The Key to Retaining Millionaire Clients.
FIGURE 1:
MILLIONAIRES ARE MOST LIKELY TO CONGREGATE IN THE SOUTH
18%
21%
25%
Distribution of millionaire respondents by region
36%
WEST
MIDWEST
SOUTH
NORTHEAST
Source: Fidelity Millionaire Outlook, December 2006
3
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■
Millionaires in the West built their wealth through real
estate. As a result of the past surge in housing and property
John Porter
Prototype of a Western Millionaire
values, half of Western millionaires claim that real estate
investment appreciation contributed to their wealth. More
John Porter, 45, takes risks in both his career
so than millionaires in any other region, Western millionaires
and his investments, but he is not reckless. A
are concerned about supporting their desired lifestyle today
senior sales executive for a major pharmaceutical
and enjoy not only the highest incomes and assets among
firm, John has not only amassed considerable
all major regions (see Figure 2), but are also saddled with
wealth from his career; he also invested shrewdly
the most debt. While 67% use a financial advisor, they are
in the West Coast real estate market in early
less likely to rely on outside advice when making investment
2000. His financial concerns revolve more around
decisions than any other regional millionaire.
managing his investments and supporting his
current lifestyle than longer-term retirement or
■
Midwestern millionaires credit their jobs as their primary
source of wealth. Eighty-two percent earned their $3.2 million
in investable assets through employment compensation, and
50% cite stock options/profit sharing as a key source of wealth,
higher than millionaires in any other part of the country. With
a greater percentage of Delegators (see Figure 3) than other
regions, Midwestern millionaires are the most likely among
all millionaires to use an advisor (73%) (see Figure 4), are the
most satisfied with their advisor, and are the most apt to work
with more than one advisor (8% use three or more). Despite
having the lowest incomes of all regions, typically, Midwestern
millionaires have the lowest household debt ($230,000) and
are most likely to feel financially secure.
■
Northeastern millionaires are focused on the traditional
values of education and family. At an average age of 60,
Northeastern millionaires are the most likely to have an
advanced degree (49% with a Master’s or Doctorate). Earning
estate planning. John is a Soloist. He trusts his
own investment instincts and sees himself in the
driver’s seat of any relationship with a financial
advisor. But he seeks and values expertise in
specific areas of the market and financial affairs.
To benefit from such expertise, John works
with three separate investment advisors, one
employed by a large brokerage firm and two
independent advisors. He turns to each for
their different areas of expertise: investment
recommendations from his broker, tax and estate
planning from an independent advisor who is
a wealth manager, and for stock picking and
performance to an independent advisor who is
an asset manager. This lets John benefit from
diverse advisory expertise while still feeling like
the quarterback of his financial life.
$400,000 on average, they have the second highest household
income among the regions. Their average investable assets
are $4.1 million, accumulated largely through employment
compensation and investments. With a greater percentage
of children under 18 years old (25%) than millionaires in
other regions, Northeastern millionaires are more focused
on providing for their family’s financial security, paying for
children’s education, and leaving an inheritance. Two-thirds
use an advisor, with an emphasis on estate planning.
4
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FIGURE 2:
WESTERN MILLIONAIRES HAVE THE HIGHEST AVERAGE ASSETS AND INCOME
REGION
INVESTABLE ASSETS
HOUSEHOLD INCOME
West
$5.5M
$430K
Northeast
$4.1M
$400K
South
$4.1M
$340K
Midwest
$3.2M
$320K
Source: Fidelity Millionaire Outlook, January 2008
FIGURE 3:
WHILE VALIDATORS ARE MOST LIKELY TO DOMINATE OVERALL, THERE ARE MORE DELEGATORS IN THE
MIDWEST/SOUTH THAN IN OTHER REGIONS
20%
22%
26%
33%
38%
41%
42%
Midwest
VALIDATOR
37%
41%
South
DELEGATOR
West
26%
31%
43%
Northeast
Source: Fidelity Millionaire Outlook, January 2008
SOLOIST
FIGURE 4:
MIDWEST MILLIONAIRES ARE THE MOST LIKELY TO WORK WITH ADVISORS
27%
29%
33%
34%
73%
71%
67%
Midwest
South
West
Work with at least one advisor…
YES
NO
66%
Northeast
Source: Fidelity Millionaire Outlook, December 2006
5
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Allen & Jeanne Nash
Prototype of a Midwestern
Millionaire Household
The Top 10 Metropolitan Areas
Where Millionaires Live2
Looking deeper into each of the country’s four regions, an
The Nashes, married for 30 years, have been
analysis of the Fidelity Millionaire OutlookSM survey reveals
building their wealth slowly and methodically. As
that millionaires gravitate to the largest U.S. metropolitan
a senior executive in the manufacturing industry,
areas.3 New York, Chicago, and Los Angeles account for
Allen has accumulated a sizable concentration of
a cumulative 18% of the nation’s millionaire households,
wealth through stock options, supplemented with
while areas such as Boston and Phoenix account for 2%
income from Jeanne’s earnings as a real estate
each (see Figure 5).
broker. The couple has never spent frivolously
or even approached living beyond their means.
They’ve paid off their mortgage and have no debt.
Nevertheless, Allen and Jeanne worry about their
FIGURE 5:
METROPOLITAN AREAS WHERE MILLIONAIRES LIVE
retirement, wondering whether their conservative
AREA
investing approach will let them retire in the way
1. New York–Newark–Edison, NY-NJ-PA
7%
they’ve always envisioned. They are looking for
2. Chicago-Naperville-Joliet, IL-IN-WI
6%
ways to finance an active retirement with frequent
3. Los Angeles–Long Beach–Santa Ana, CA
5%
trips abroad. They’d also like to buy a spacious Lake
4. Dallas–Ft. Worth–Arlington, TX
3%
Michigan summer home and spend time there with
5. Washington-Arlington-Alexandria, DC-VA-MD-WV
3%
children and grandchildren. They worry about how
6. San Francisco–Oakland–Fremont, CA
3%
they can do that without depleting the nest egg they
7. Atlanta–Sandy Springs–Marietta, GA
3%
hope to leave their family. The Nashes have worked
8. Miami–Ft. Lauderdale–Miami Beach, FL
3%
with the same independent advisor for more than 15
9. Boston-Cambridge-Quincy, MA-NH
2%
years. They appreciate his focus on protecting and
10. Phoenix-Mesa-Scottsdale, AZ
2%
preserving their wealth, rather than taking risks with
it, and they are happy to delegate their investment
decisions to him. They intend to discuss their overall
estate plan, as well as their immediate goals, with
their advisor during their next meeting with the
TOTAL
Source: Fidelity Millionaire Outlook, December 2006
2
“Where they live” refers to the millionaire respondent’s primary residence.
3
In this report, “metropolitan area” refers to a “Core Based Statistical Area”
(CBSA). A CBSA is a term used by the U.S. Census Bureau to define areas
with more than 10,000 people connected to an urban core.
expectation that he can provide them with a plan that
will help them realize their retirement dreams without
draining their funds.
6
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Daniel Johnston
Prototype of a Northeastern Millionaire
10 Surprising Millionaire Zip Codes
The Fidelity Millionaire OutlookSM survey reveals that,
Dan Johnston, age 62 and semiretired,
when it comes to zip codes, the “tried and true” cities
continues working as a consultant to the
are not the only places where millionaires are found.
engineering firm he founded more than
While it’s not surprising to find the likes of LaJolla, CA,
20 years ago. He has always planned for
Palm Beach, FL, or Greenwich, CT, on the list of
the future, both in his business and his
millionaire zip codes, the research uncovers unexpected
investments. He takes measured risks in his
areas, including Midlothian, VA, and Surprise, AZ, with
portfolio after discussions with his wirehouse
significant numbers of millionaires (see Figure 6).
broker. Dan is a Validator who likes to
participate in the management of his assets
and informs his investment decisions by
consulting with his broker. He meets with
FIGURE 6:
SURPRISING MILLIONAIRE ZIP CODES
his advisor quarterly, and they jointly make
CITY
ZIP CODE
investment decisions based on Dan’s evolving
Wayzata, MN
55391
needs. Based on the strength of this personal
Croton-on-Hudson, NY
10520
relationship, Dan frequently refers business
Lemay, MO
63125
associates to his advisor. Recently, however,
Bellevue, NE
68005
Dan has begun to shift his attention toward his
Avondale, OH
45229
children and grandchildren, seeking to provide
Tuscaloosa, AL
35401
them with a solid financial legacy. Given this
Piedmont, SC
29673
new focus, Dan is strongly inclined to add a
Midlothian, VA
23113
second advisor, someone with more specific
Londonderry, NH
03053
estate-planning expertise. After asking
Surprise, AZ
85374
several business associates for a referral, he
Source: Fidelity Millionaire Outlook, December 2006
has narrowed his search to two registered
investment advisors who both provide
comprehensive wealth management services.
7
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How Millionaires Differ by
Metropolitan Area
Millionaires are, by far, most concentrated in
major U.S. metropolitan areas, with 37% living in
10 specific areas (see Figure 7). Looking deeper
within each area and profiling the millionaires
who live there reveals geographically unique
characteristics, financial attitudes, and behaviors.
FIGURE 7:
MAP OF THE U.S., DEPICTING METROPOLITAN AREAS WITH THE HIGHEST NUMBER OF MILLIONAIRE HOUSEHOLDS
9
1
2
5
6
Top 10 millionaire metropolitan areas
3
10
7
WEST
MIDWEST
SOUTH
NORTHEAST
4
Source: Fidelity Millionaire Outlook, December 2006
1
NEW YORK
2
CHICAGO
3
LOS ANGELES
4
DALLAS
5
WASHINGTON, D.C.
6
SAN FRANCISCO
7
ATLANTA
8
MIAMI
9
BOSTON
10
PHOENIX
8
8
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1. New York Claims the Highest Number
of Millionaires
■
Value financial advisors. New York millionaires
value independent and objective advice (84%) and
personalized service, either in person or on the phone
At the top of the list, the metropolitan area that includes
New York, northern and central New Jersey, Long Island,
and Pike County, Pennsylvania, is home to 7% of the
nation’s millionaires. New York millionaires:
(59%). Sixty-four percent of New York millionaires
work with advisors, and the vast majority are happy
with them (91%). They look primarily for investment
recommendations (57%) and detailed reporting on
their portfolio performance (51%). Of those who work
■
Are typically male, married retirees. Three-quarters of New
with advisors, 53% have a relationship with a wirehouse
York millionaires are men, and almost 9 out of 10 are married.
broker, while 41% rely on the services of independent
More than half are retired. Three-quarters feel financially secure,
advisors. Three-quarters have referred an advisor to
with $3.8 million in investable assets and a household income of
someone else, largely because they were satisfied with
$400,000, on average, earned primarily through employment and
that advisor’s investment performance (77%; see Figure 8).
investment returns. Half credit their wealth at least partly to real
estate appreciation.
■
Actions to Consider:
Worry about managing and stretching their investments.
While three-quarters of New York millionaires consider themselves
financially secure (74%), more than half cite estate planning and
Guide NY Millionaires in Planning
for the Next Generation.
investment management as pressing financial concerns. Four
out of 10 worry about supporting their lifestyle in retirement and
Given New York millionaires’ concerns about
leaving their children an inheritance. One-quarter stay up at night
managing and seeing their investments perform, and
thinking about paying for their children’s education.
providing for their children, consider offering New
York millionaires advice and assistance with setting
up a wealth management plan that offers flexibility
for current investments, while preserving an incomegenerating nest egg for later in life. Be proactive in
providing New York millionaires with detailed reports
on their investments. They value regular, up-to-date
information about their assets and liabilities. Bring
in trust experts to help them establish vehicles for
transferring their wealth to the next generation. Show
them tax-efficient ways to help them pay for their
children’s education.
FIGURE 8:
WHY NEW YORKERS MAKE REFERRALS
77%
INVESTMENT PERFORMANCE
69%
GOOD PERSONAL RELATIONSHIP
59%
GOOD CUSTOMER SERVICE
56%
MEETS ALL FINANCIAL NEEDS AND GOALS
49%
SERVES NEEDS OF ENTIRE LIFE, NOT ONLY FINANCES
25%
50%
75%
100%
Source: Fidelity Millionaire Outlook, December 2006
9
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2. Chicago Showcases
Midwestern Millionaires
■
millionaires work with an advisor, with a substantial majority
choosing to work with a wirehouse broker (71% of those
Chicago represents the metropolitan area with
the second-highest number of millionaire
households. This metropolitan area includes
Chicago, Naperville, Joliet, and Lake County in
Illinois; Gary, Indiana; and Kenosha, Wisconsin.
It accounts for 6% of the nation’s millionaire
households. Chicago millionaires:
■
using an advisor). Three in 10 Chicago millionaires work with
independent financial advisors, preferring comprehensive
wealth managers to asset managers. Six out of 10 engage
an advisor for investment recommendations, while two-fifths
turn to an advisor for comprehensive wealth management.
Ninety percent are satisfied with the services they receive
from their advisors.
Are middle-aged, married professionals. At an average
age of 60, two-thirds of Chicago millionaires are men, and
the vast majority are married. Three-fifths are still working
and they have, on average, $3.4 million in investable
assets and an annual household income of $410,000,
earned mostly through employment compensation
Actions to Consider:
Help Chicago Millionaires Create
a Retirement Plan.
Given Chicago millionaires’ focus on long-term wealth
and investments.
■
Gravitate to brokers. Nearly three-quarters of Chicago
preservation, consider working with these clients to develop
a comprehensive low-risk retirement plan. Show them how to
Worry about preserving their nest egg. Chicago
millionaires are conservative investors: Only 1 in 10 (11%)
conservatively invest their money now to help them finance
is willing to set aside a large portion of their money for
an active retirement in the future. Since they tend to be less
high-risk investments. Similarly, wealth preservation is
interested in reducing debt, give them an effective overall
more important to them than wealth accumulation. These
financial strategy that can help to provide current income
millionaires are more concerned with supporting their
that could be reinvested in a retirement portfolio while still
desired lifestyle in retirement (48%) than with supporting
preserving their capital. Consider giving Chicago millionaires
their lifestyle today (19%; see Figure 9). Since the vast
specific investment recommendations, and offer to execute
majority (82%) are cautious spenders, they do not fret
the transactions for them.
about their families’ financial security or reducing debt.
FIGURE 9:
TOP 10 PRESSING FINANCIAL CONCERNS FOR CHICAGO MILLIONAIRES
1. SUPPORTING LIFESTYLE IN RETIREMENT
48%
46%
2. MANAGING INVESTMENTS
3. MAINTAINING HOUSEHOLD WEALTH
38%
29%
4. INCREASING HOUSEHOLD WEALTH
24%
5. PAYING FOR CHILDREN’S/GRANDCHILDREN’S EDUCATION
23%
6. LEAVING INHERITANCE TO CHILDREN
22%
7. ESTATE PLANNING
19%
8. SUPPORTING LIFESTYLE TODAY
15%
9. PROVIDING FOR FAMILY’S FINANCIAL SECURITY
2%
10. REDUCING DEBT
0%
10%
20%
30%
40%
50%
Source: Fidelity Millionaire Outlook, January 2008
10
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3. Los Angeles Millionaires Focus
More on Today Than Tomorrow
■
Spread the wealth across multiple advisors. Of
the 69% of Los Angeles millionaires who work with
advisors, 37% have two advisors, and another 12%
The Los Angeles metropolitan area includes
Los Angeles, Long Beach, Glendale, Santa Ana,
Anaheim, Irvine, and Orange County. It accounts for 5%
of the country’s millionaires. Los Angeles millionaires:
have three or more. They favor working with either
brokerage firms or independent advisors who provide
comprehensive wealth management. A loyal group,
these millionaires have stayed with their advisors for
11 years, on average. L.A. millionaires like investment
Are younger and wealthier than other millionaires.
tips; over half (59%) rely on advisors for investment
Los Angeles millionaires are, on average, 52, and the vast
recommendations. L.A. millionaires are among the
majority are still working. They are well compensated, with an
least likely to make investment decisions on their
average household income of $740,000, the highest for any
own (19%). Validators by nature, they prefer to make
leading U.S. metropolitan area. This helps fuel an average $8.9
investment decisions in close consultation with an
million in investable assets. While most L.A. millionaires credit
advisor. When asked about the most important
investments for their wealth, half (48%) also cite appreciating
characteristic they seek in a financial provider, L.A.
real estate holdings.
millionaires single out investment performance above
■
■
Focus on accumulation and boast a higher risk tolerance.
Los Angeles millionaires’ most pressing financial concerns revolve
anything else (54%), while other millionaires choose
ethical conduct (see Figure 10).
around increasing their wealth, not preserving it, with 20%
willing to set aside a large portion of their portfolios for high-risk
investments. One-quarter say that when they want something,
they buy it immediately. Perhaps not surprisingly, nearly one-third
consider reducing debt to be a priority. They aren’t as worried
Actions to Consider:
Help L.A. Millionaires Protect
Their Assets.
about financing their lifestyle in retirement as they are about
financing their current lifestyle. Even fewer are uneasy about
With many Los Angeles millionaires owning
having tax or estate plans.
multimillion-dollar homes, it isn’t surprising that they’re
concerned about having enough property insurance.
Consider bringing in an insurance specialist who can
help them wade through the product options, and
work with them to determine how much coverage
they need. Talk with them about how diversifying away
from real estate and investing in liquid assets could
potentially allow them to build a more comfortable
cushion for the future. Suggest that they consider
taking advantage of a fuller spectrum of asset
categories to help them mitigate risk.
FIGURE 10:
LOS ANGELES MILLIONAIRES VALUE INVESTMENT PERFORMANCE MOST OF ALL
Most important characteristic in choosing a financial provider:
STRONG INVESTMENT PERFORMANCE
54%
37%
ETHICAL CONDUCT
7%
EXPERTISE IN SPECIFIC INVESTMENT VEHICLE
PRESTIGE AND EXCLUSIVITY
1%
0%
Source: Fidelity Millionaire Outlook, December 2006
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15%
30%
45%
60%
11
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4. Dallas Millionaires
Prefer Personal Touch
■
Rely on their advisor for investment decisions. Seven in
10 Dallas millionaires work with an advisor, and of those, the
majority (68%) have only one. Half of millionaires with advisors
The metropolitan area, including Dallas, Plano,
Irving, Arlington, and Fort Worth, accounts for 3%
of U.S. millionaire households. Dallas millionaires:
use a wirehouse broker (47%), while the rest work primarily
with independent advisors focused on wealth management.
They are less likely than millionaires elsewhere to make their
own investment decisions, relying instead on experts (see
■
Are entrepreneurial. Almost one-third of Dallas
Figure 11). A personable group, Dallas millionaires stand out
millionaires made their money through launching and
from other millionaires in their preference for personal service,
owning a business (31%), among the highest percentages
either face to face or on the phone (77%).
in the country, and they are among the least likely in the
country to have inherited their wealth (23%). Likewise,
fewer Dallas millionaires than elsewhere (32%) cite real
estate appreciation as contributing to their wealth. After
L.A., Dallas millionaires lay claim to the second-highest
income ($547,000) and investable assets ($3.9 million)
Actions to Consider:
Help Dallas Millionaires with Decision
Making and Simplicity.
among all regions. Almost 40% are female, tying L.A.
Dallas millionaires tend to hand off decision making and
for the highest proportion of female millionaires.
execution to investment experts. Develop an investment plan
■
Don’t spend their money freely. Almost 90% say they
that can help them grow their assets—and then show them
are careful about how they spend their money, among the
how you can take much of the work off their hands. Help them
highest percentages for millionaires in all metropolitan
with their business needs by offering advice or bringing in
areas. Confident in their financial status, they are less
experts on business insurance plans and tax strategies. Show
worried about providing for their families’ financial security
them the pros and cons of different corporate structures,
or reducing debt. They value simplicity, with almost two-
and help them create a borrowing plan should the business
thirds saying they want to simplify their financial life.
need it. Help Dallas entrepreneurs grow their companies with
More so than millionaires in other cities, they consider
new investments; demonstrate the pros and cons of different
increasing their household wealth to be their top priority.
financing options and perhaps work with them to create an
Not surprisingly given their entrepreneurial nature, 1 in 10
investment plan for the business’s profits. Help them retain
believe funding a current business is a pressing financial
good employees by establishing an employee stock option plan.
concern—which is not on the radar screen at all for
millionaires in other metropolitan areas.
FIGURE 11:
WHEN MAKING INVESTMENT DECISIONS, DALLAS MILLIONAIRES PREFER TO RELY ON EXPERTS FOR ADVICE
DEPEND ON ADVICE FROM EXPERTS
59%
20%
PREFER TO MAKE INVESTMENT DECISIONS ON MY OWN
WITHOUT ADVICE
Source: Fidelity Millionaire Outlook, December 2006
0%
15%
30%
45%
60%
12
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5. Washington, D.C., Boasts Some
of the Most Educated Millionaires
in the Country
■
Rely on advisors for comprehensive wealth
management. Three-quarters of Washington
millionaires work with an advisor, and of those, almost
a third have more than one. Almost half (44%) use
The metropolitan area—including Washington, D.C.;
Bethesda, Frederick, Gaithersburg, Montgomery,
Calvert, Charles, and Prince George’s County in
Maryland; Arlington, Alexandria, and 13 other areas in
Virginia; as well as Jefferson in West Virginia—accounts
for 3% of millionaires. Washington, D.C., millionaires:
a wirehouse broker, while more than a third (36%)
work with independent advisors. This latter group
expresses a strong preference for advisors who
offer comprehensive wealth management services.
Washington, D.C. millionaires primarily seek detailed
reporting on their portfolio’s performance and look for
investment recommendations; they are less interested
■
in seeing a consolidated view of their assets or pure
Are highly educated inheritors. More than one-third of
Washington millionaires inherited their wealth, and they are the
investment information (see Figure 12).
least entrepreneurial of all U.S. millionaires. With an inheritance
helping to fund their education, almost one-quarter of
Washington millionaires have earned a doctorate, making them
among the best-educated millionaires in the country. Education
pays off: Washington millionaires have investable assets of $2.8
million and income of $374,000.
■
Worry about kids and life after work. Like Dallas millionaires,
Actions to Consider:
Help D.C. Millionaires Plan For
Funding Their Children’s Education.
Given their concerns about paying for their children’s
education, show them how a college savings account
9 out of 10 say they are careful about how they spend their
money. But, unlike Dallas millionaires, D.C. millionaires are more
concerned with retirement and leaving money to their children.
More so than in any other metropolitan area, D.C. millionaires
worry about supporting their lifestyles in retirement (68%). About
half fret over maintaining their current household income. This
group is also more concerned than other millionaires are about
funding children’s education and leaving them an inheritance—
not surprisingly, given their own inheritance and high level of
can be a tax-efficient investment vehicle. Illustrate for
them how trusts for grandchildren would allow for
tuition to be paid out as income, while keeping the
bulk of the principal for later distribution to heirs. They
are an educated group; show them how investment
strategies work, and demonstrate model portfolios.
Give them detailed projections of financial strategies,
and show how market volatility can vary the outcome.
education.
FIGURE 12:
WHY D.C. MILLIONAIRES LOOK TO AN ADVISOR
52%
DETAILED REPORTING ON PORTFOLIO PERFORMANCE
48%
INVESTMENT RECOMMENDATIONS
34%
INVESTMENT INFORMATION
32%
CONSOLIDATED VIEW OF ASSETS
0%
15%
30%
45%
60%
75%
Source: Fidelity Millionaire Outlook, December 2006
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6. San Francisco’s Real Estate
and Dot-Com Booms Created
Investment-Savvy Millionaires
■
Stick with one advisor. Among the 61% of San Francisco
millionaires who work with an advisor, most are inclined to
have one, and they’ve worked with that advisor for 11 years on
average. They depend on their advisor for detailed reporting
on portfolio performance and investment recommendations,
The metropolitan area, including San Francisco,
Oakland, Fremont, Haywood, Marin, and San
Mateo, accounts for 3% of millionaires. San
Francisco millionaires:
but rely less on an advisor to implement investment decisions
for them. Half work with a broker employed by a brokerage
firm, while 44% use an independent advisor. More say that
when they refer an advisor to someone else, they consider the
■
personal relationship with that advisor to be a more important
Are savvy investors. Despite the myth of a city filled
factor than the performance of their investments.
with young, wealthy entrepreneurs, San Francisco
millionaires are on average 58 years old, very close to
the average age of 59 for all metropolitan millionaires
nationwide. However, San Francisco millionaires are
Actions to Consider:
slightly less likely to be married (78%) and among the least
Attract and Serve San Francisco
Millionaires Online.
likely to have children living at home (17%). And, unlike
millionaires elsewhere, San Francisco millionaires credit
investment gains as the main contributor to their wealth,
Give Silicon Valley millionaires the tools to manage their
topping employment compensation. They are also the
investments online. Direct them to self-serve Web sites
most apt to have become rich as a result of the dramatic
and resources and communicate with them regularly via
rise in real estate prices in the past decade. They boast,
e-mail, rather than by phone or in person. Make investment
on average, $3.2 million in investable assets and $335,000
recommendations, but don’t push to execute the trades for
in annual household income.
■
them. Since San Francisco millionaires seek to increase their
wealth and want to support a comfortable retirement, consider
Seek financial simplification online. San Francisco
millionaires are most likely to use the Internet in order
offering them a financial plan that maximizes their current
to meet their need for simpler financial lives (62% seek
investment income; reinvest some of that income and suggest
simplification). The majority (53%) prefer to manage
a more conservative ongoing strategy. Create detailed, online
their finances themselves online—more than millionaires
reports of their investment performance.
elsewhere (see Figure 13). San Francisco millionaires tend
to worry about tax planning (36%) and estate planning
(36%). With more single, childless millionaires in San
Francisco than in any other major metropolitan area, it is
not surprising that San Francisco millionaires are the least
concerned about leaving an inheritance.
FIGURE 13:
SAN FRANCISCO MILLIONAIRES USE THE INTERNET TO MANAGE THEIR WEALTH
I SEEK TO SIMPLIFY MY FINANCIAL LIFE
62%
I PREFER TO IMPLEMENT INVESTMENT DECISIONS MYSELF
61%
I LIKE TO MANAGE MY FINANCES MYSELF, ONLINE
53%
0%
15%
30%
45%
60%
75%
Source: Fidelity Millionaire Outlook, December 2006
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7. Atlanta Millionaires
Depend on Their Advisors
have two or more advisors and stay with them for an
The Atlanta metropolitan area, which accounts for 3% of
the nation’s millionaires, includes Atlanta, Sandy Springs,
and Marietta. Atlanta millionaires:
to make investment decisions themselves; the majority
average of 11 years. Atlanta millionaires are the least
likely of millionaires in major metropolitan areas (17%)
(83%) depend on their advisor’s expert counsel for
direction or approval. Validators by nature, they look
for comprehensive wealth management and are more
■
Are married, corporate executives. At an average age of 59,
likely than millionaires in other major metropolitan
half of Atlanta’s millionaires are retired. However, 36% of those
areas to turn to their advisors for estate planning (see
retirees—more than retired millionaires elsewhere—choose to
Figure 14).
continue working part-time. Perhaps because of their retirement
status, Atlanta millionaires have among the lowest household
incomes ($279,000) and investable assets ($2.9 million), compared
Actions to Consider:
with millionaires in other metropolitan areas.
■
Offer Atlanta Millionaires Advice
On Estate Planning.
Worry about children and eldercare. Nearly one-quarter (24%)
of Atlanta millionaires fret about caring for an aging parent, more
than millionaires in any other leading metropolitan area do. They
Push Atlanta millionaires to set up or update their
are also concerned with paying for their children’s education and
estate plan in order to help them meet their multiple
leaving them an inheritance. And they are cautious about how
goals. For example, you can advise clients who are
they spend their money; paying down debt is important to them.
concerned with eldercare and children’s education
to set up a trust to pay for their parents’ long-term
■
Depend on their advisors and are loyal to them. Atlanta
health-care needs while still providing their children
millionaires value independent and objective financial advice and
with a secure nest egg. To boost the latter, explore
seek a personal touch, via phone or in person. Three-quarters
tax-efficient strategies for building education savings.
of Atlanta millionaires work with an advisor (75%); of those, 30%
Show them the benefits of various estate plans to keep
their wealth in the family. Make specific investment
recommendations for their portfolio, and offer to
execute the transactions for them.
FIGURE 14:
TOP 10 REASONS ATLANTA MILLIONAIRES LOOK TO AN ADVISOR
62%
1. INVESTMENT RECOMMENDATIONS
51%
2. DETAILED REPORTING ON PORTFOLIO PERFORMANCE
47%
3. COMPREHENSIVE WEALTH MANAGEMENT
47%
4. ESTATE PLANNING
5. CONSOLIDATED VIEW OF ASSETS
36%
6. TAX ADVICE
36%
28%
7. INVESTMENT INFORMATION
18%
8. TAX PREPARATION
16%
9. LENDING SERVICES
13%
10. MARGIN LOANS
0%
15%
30%
45%
60%
75%
Source: Fidelity Millionaire Outlook, December 2006
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8. Miami Millionaires
are Frugal Retirees
■
Value personal connections. Two-thirds of Miami
millionaires work with an advisor (66%), and of those who
do, more than a third have two or more. Almost half (46%)
The metropolitan area that includes Miami,
Miami Beach, Fort Lauderdale, Pompano Beach,
Deerfield Beach, Kendall, West Palm Beach,
Boca Raton, and Boynton Beach accounts for
3% of America’s millionaires. Miami millionaires:
use a wirehouse broker. Befitting retirees who may be living
off trusts, one-fifth use a private banker or trust officer as
their advisor, a higher percentage than any other group of
metropolitan millionaires. Almost 9 in 10 are satisfied with their
advisor relationship, and 75% have referred their advisor (see
Figure 15). More than in any other metropolitan area, Miami
■
Are older, retired men. At an average age of 63, Miami
millionaires are the oldest nationwide. Not surprisingly,
millionaires look to their advisors to track and monitor their
finances (31%).
over 70% are retired, and only 2 in 10 work full-time.
They make, on average, $332,000 a year. Three-quarters
say their wealth ($3.6 million in investable assets) comes
from investment appreciation; over half cite employment
compensation as the source. Though retired, almost 4 in
10 (39%)—the highest percentage in the country—credit
entrepreneurship for their wealth.
■
Actions to Consider:
Promote Your Expertise to Miami Millionaires.
To help South Floridian millionaires, consider suggesting a
retirement income plan to help them balance their needs
today and for the future; if they fear outliving their assets,
Worry about maintaining their wealth, and the
weather. Given that they are largely retired, Miami
perhaps show them the benefits of incorporating annuities
millionaires focus on preserving their wealth as their
into their plan. Being older investors, only a handful (1%) have
top financial priority (53%). This concern is followed by
investments in relatively new exchange-traded funds, far lower
managing their investments (47%). Not surprisingly, far
than millionaires elsewhere. Show them how the low-cost
lower on the list of worries for these retirees is estate
niche funds can complement a retirement portfolio. Help them
planning (32%) or caring for family members (14%). But
secure adequate property insurance, or explore alternative
South Floridians have something else to worry about.
ways to insure their home, such as self-insurance pools for
Given the coast’s frequent battering by hurricanes,
condo owners.
a quarter of Miami millionaires (26%)—far more than
millionaires anywhere else in the country—fret about
having sufficient property insurance.
FIGURE 15:
WHY MIAMI MILLIONAIRES MAKE REFERRALS
INVESTMENT PERFORMANCE
79%
GOOD PERSONAL RELATIONSHIP
73%
53%
GOOD CUSTOMER SERVICE
48%
MEETS ALL FINANCIAL NEEDS AND GOALS
33%
INVESTMENT PHILOSOPHY MIRRORED MINE
31%
LOCATED IN MY COMMUNITY
0%
20%
40%
60%
80%
Source: Fidelity Millionaire Outlook, December 2006
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9. Boston Millionaires Exemplify a New
Generation of Wealth
■
Rely on advisors for specific product expertise.
Boston millionaires are the least likely of all
metropolitan millionaire areas to work with an advisor,
The metropolitan area comprising Boston, Cambridge,
and Quincy, Massachusetts, along with southern New
Hampshire, accounts for 2% of the country’s millionaires.
Boston millionaires:
and those who do use an advisor (55%) generally
use just one, relying on that advisor primarily for
investment recommendations and detailed reporting
on the performance of their portfolios. Half use a
wirehouse broker (50%), while 3 out of 10 use an
■
Are single entrepreneurs. At an average age of 57, Boston’s
independent broker. More likely to be Soloists, Boston
millionaires include the lowest proportion of married millionaires
millionaires depend on their advisors to fill gaps in
(72%) of all the metropolitan areas. With an average income of
the product knowledge with their expertise in specific
$421,000, they hold investable assets of $3.5 million on average,
investment vehicles.
are among the most likely to be employed full time (60%), and
more than a third (35%) credit entrepreneurship for their wealth,
the second-highest level of entrepreneurship after Miami’s
Actions to Consider:
retirees (see Figure 16). More Boston millionaires hold advanced
Help Boston Millionaires With
Their Small Businesses.
degrees than any other metropolitan region, with 55% holding a
graduate or post-graduate degree.
■
With the second-highest percentage of entrepreneurs
Worry about their children’s money management. Boston
millionaires who have or are planning families are also more given
among them, these clients will appreciate advisors’
than other millionaires to worrying about leaving an inheritance to
help in planning for the future of their businesses,
their children, and about their children’s ability to manage money.
whether they’re seeking working capital in the earlier
Boston millionaires also fret about supporting their desired
stages or are looking at succession planning as the
lifestyle in retirement (59%), increasing family wealth (47%), estate
business matures. Since millionaires in Boston worry
planning (46%), and managing investments (45%).
about how their children will handle the wealth they
stand to inherit, offer to help clients teach financial
responsibility as they transfer the family business assets
to the next generation. Perhaps invite the millionaire’s
children to a meeting with the client, to demonstrate
how financial planning works, or help set up a small
account for the millionaire’s children to manage.
Provide tips for tax-efficient investing, and offer to
help them prepare their returns.
FIGURE 16:
BOSTON IS HOME TO HIGHLY COMPENSATED AND ENTREPRENEURIAL MILLIONAIRES
Source of wealth:
COMPENSATION (SALARY, BONUSES, COMMISSIONS)
67%
INVESTMENTS/CAPITAL APPRECIATION
64%
REAL ESTATE INVESTMENTS
40%
ENTREPRENEURSHIP
35%
33%
STOCK OPTIONS
INHERITANCE
23%
0%
15%
30%
45%
60%
75%
Source: Fidelity Millionaire Outlook, December 2006
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10. Phoenix is Home to Self-made
Retired Millionaires
■
Gravitate to private bankers or trust officers. Although
more than half of Phoenix millionaires are self-described “do-ityourselfers” and enjoy managing their finances online, almost
This metropolitan region, including Phoenix,
Mesa, Scottsdale, and Maricopa and Pinal
counties, accounts for 2% of millionaires in
the U.S. Phoenix-area millionaires:
two-thirds use an advisor. Among them, nearly a third (32%)
employ two or more. Like their Miami counterparts, Phoenix
millionaires also tend to work with a private banker or trust
officer (21%; see Figure 17). They depend on their advisors
primarily for investment recommendations (59%) and detailed
■
Are older, retired men. Phoenix, along with Atlanta, has
the highest proportion of male millionaires among all the
reporting on portfolio performance (47%), but 4 in 10 also seek
a consolidated view of their assets.
metropolitan areas, and, with an average age of 60, they
are among the oldest. Not surprisingly, Phoenix’s climate
also draws the second-highest concentration of retired
Actions to Consider:
millionaires (69%) after Miami. Despite their retirement
status, Phoenix millionaires boast a healthy household
income of $366,000 and investable assets of $2.8 million,
Show Phoenix Millionaires the Power of
Retirement Income Planning.
on average, due in part to savvy investments in the rapidly
growing Southwest. Like most of America’s millionaires,
With Phoenix millionaires concerned about maintaining their
Phoenix’s are self-made, crediting their preretirement
wealth and supporting their current lifestyle in retirement,
compensation for their wealth, earned largely as senior
consider focusing on educating these clients as to the critical
corporate executives.
importance of a lifetime income plan. Show them how you
can implement a comprehensive retirement income strategy
■
that can help them to preserve more of their wealth. Consider
Worry about running out of money in retirement.
More than any other regional millionaire, Phoenix
leveraging tools to assist in modeling various retirement
millionaires worry about maintaining their household
income scenarios to project their assets over time. Frequently
wealth (58%). They are also most likely to consider
confer with them about their plan, even after it has been
supporting their current lifestyle in retirement. Their
put into motion, and meet regularly to review their portfolio
worries may be a result of their spending habits, with more
performance and alter their strategy to account for any
than half of Phoenix millionaires—more than in any other
projected surpluses or shortfalls.
region—admitting to buying things they want immediately.
Feeling financially insecure, they are also concerned that
their children will be affected. One out of four (26%) want
to ensure their children can manage wealth responsibly,
and 1 in 10 (12%) are supporting grown children, a higher
rate than millionaires elsewhere.
FIGURE 17:
TYPES OF ADVISORS PHOENIX MILLIONAIRES USE
BROKER EMPLOYED BY A BROKERAGE FIRM
59%
PRIVATE BANKER/TRUST OFFICER
21%
INDEPENDENT WEALTH MANAGER
21%
INDEPENDENT MONEY MANAGER
2%
0%
15%
30%
45%
60%
Source: Fidelity Millionaire Outlook, December 2006
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Further Considerations to Help You
Strengthen Client Relationships
■
Different millionaires, different approaches. Understanding
■
Some things don’t depend on geography.
the needs and concerns of millionaires in specific parts of the
Regardless of where your millionaire clients live,
country can help you fine-tune your advice and the services you
there are similarities. For the affluent, you can benefit
bring to these clients—and help interest potential clients. Being
if you think of your firm as a quarterback of a team
fluent in the financial needs of the millionaires in your town—
of specialists. Bring together an experienced team
whether they’re Boston entrepreneurs with kids or older Dallas
of insurance planners, tax and accounting firms, and
corporate executives looking for someone to make investment
estate lawyers to help your clients. If you can provide
decisions for them—you’ll sharpen your approach, and your
these millionaires with a single point of contact to
clients will be grateful for it.
access a spectrum of experts, you’ll likely be viewed
as an ally.
To varying degrees, all millionaires, regardless of
where they live, say that they want advice from
independent and objective experts, that they want
to be kept in the loop regarding their investments’
performance, and that they value close personal
relationships with their advisors.
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About Fidelity Institutional Wealth Services
Fidelity Institutional Wealth Services is a leading provider of wealth management, custody, and brokerage services to financial
intermediaries. The company custodies more than $341 billion in assets on behalf of more than 3,800 RIAs, bank trust, and
TPA firms, as of March 31, 2008. Fidelity provides access to a flexible, open technology environment, extensive practice
management resources, and wealth management investments and services—all backed by the long-term commitment of a
private company. Dedicated relationship professionals work consultatively to help clients choose the products and services
that are in the interest of their clients and that make the most sense for their business.
For more information about Fidelity’s services, please visit http://fiws.fidelity.com.
POWE R YOUR HIGH-NET-WORTH BUSINESS
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Our goal is to equip you with the business-building insight that can give you a true advantage
in the marketplace. Look to us for a wealth of information and resources as you take steps to tap
into an unprecedented market opportunity.
• Research and thought leadership to help you power your high-net-worth business
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490981
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1.868981.100
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