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Millionaires Want Market Exposure

If there's still cash on the sidelines, it doesn't belong to millionaires, according to U.S. Bank's Millionaire Investor Insights Annual Survey.

The survey found that 92% of investors with $1 million or more in investable assets kept their money in the market, with 43% of them involved in active buying and selling. That's despite the fact that 97% of survey respondents lost money in the crash.

Most millionaires, 90%, say their investments are performing at pre-2008 levels, and one-fifth of survey respondents said they're ahead of where they were before the crash. Around half of wealthy investors didn't change their allocation to equities in the past three years and said that their risk tolerance hasn't changed either.

Perhaps most striking is wealthy investors' support for their primary financial advisers-some 92% report being satisfied with the professional help they're getting. For Mark Jordahl, president of U.S. Bank's wealth management group, millionaire's bullishness combined with their satisfaction with their advisers means it's a good time to call clients. "Only one in 10 of high-net-worth individuals say they're defensive and have no risk tolerance," Jordahl said. "The vast majority wants to take advantage of market opportunities and grow their wealth."


Advisers: American Funds The Large-Cap Leader

Thirty-nine percent of financial advisers view American Funds as the leading provider of domestic large-cap mutual funds and 31% perceive the company as the dominant provider of value funds, but for other asset classes, there is no clear leader, Cogent Research found in a survey of 1,400 advisers.

The closest competitor to American Funds in these categories is BlackRock, which is named as the go-to provider of large-cap funds by 7% of advisers and of value funds by 5%.

Even among registered investment advisers, American Funds is perceived as a leader. However, Vanguard, Fidelity and Dimensional Fund Advisors also rate high.

In the mid-cap and small-cap asset classes, a much broader set of competitors begins to emerge, Cogent said. Across all six style boxes comprised of small- and mid-cap categories, Fidelity and Franklin Templeton are just a few points behind American Funds as the go-to providers. In addition, Franklin Templeton shows particular strength among regional and bank channel advisers.

"There's obviously a lot more competition for both mindshare and shelf space in asset classes outside of the large-cap arena," said Tony Ferreira, managing director of Cogent's wealth management practice. "There are at least a half dozen fund companies that are in the hunt within the mid- and small-cap space."

Among regionals, The Hartford and Lord Abbett rate high, Ferreira said. For international equity funds, American Funds and Franklin Templeton were cited most frequently, by 25% and 17%, respectively, he added. But beyond these two providers, there are at least 30 contenders in the international equity space, each with their own small piece of the pie.


Quote of the Week

"We are unlikely to see broad demand for equity funds until we see sustained job growth and other signs that the global economy, especially the U.S., is on surer footing."

- Loren Fox


Strategic Insight