31st May 2013
High-net-worth individuals’ top financial regret is not having put in place a regularly reviewed personal financial plan earlier in life, according to the results of an international poll. The second biggest financial regret was not consistently scrutinising personal investments, and the third was taking on too much unnecessary debt, the survey reveals.
When the deVere Group, the world’s largest independent financial advisory organisation, asked a sample of its clients in Europe including the UK, Asia, Africa, the Middle East and the US who have investable assets of more than £1m (or the equivalent), “what is your number one financial regret?” 57 per cent said not devising a reviewable strategy for their personal finances sooner.
A further 18 per cent said they regretted not regularly assessing the performance of their investments, 13 per cent regretted accumulating unnecessary debt, and 12 per cent cited other regrets, including not saving enough to fund their children’s or grandchildren’s education or not having built a large enough estate to leave to their heirs.
Nigel Green, chief executive of the deVere Group, says: “The poll shows that the number one regret of high-net-worth individuals was not putting in place a robust plan for their personal finances which could be efficiently and regularly reviewed. With more than half of those surveyed citing this as their overriding regret, it’s clear that wealthy individuals value highly the benefits and opportunities that long-term financial planning brings them and their families, and that they understand the importance of routinely reviewing those plans to ensure that they always remain ‘on track’ to reach their financial goals.
“The survey also highlights how high-net-worth individuals regret having not scrutinised their personal investments more thoroughly and regularly in the past. This suggests that they have previously made some costly mistakes by not keeping a closer watch over their investments which can, of course, always go down as well as up – and very quickly, especially in times of increased volatility.
“The third biggest regret of high-net-worth individuals was accumulating unnecessary debt. A lack of financial discipline, which often manifests itself into a ‘keeping up with the Joneses’-type mentality, is an enemy of wealth creation and those surveyed appear to now believe that this might have delayed them achieving their longer-term, more fundamental financial objectives.”
Green suggests that many of these concerns may well apply to middle income investors as well: “Whilst this survey focuses on high-net-worth individuals, I suspect that should the same poll of middle income earners be carried out, it would produce similar results. As someone’s wealth empowers them and their families to live the life they want to live, I imagine that any financial regrets would be fairly consistent.”
Six hundred and fifty-nine deVere Group clients who have investable assets of more than £1 million (or equivalent of) took part in the poll.