SEI Survey: Ultra Wealthy Say It Takes Work Ethic to Get Rich, Innovation to Stay There

Wealthy Agree on Importance of Innovation, Differ on Where It Should Come From

OAKS, PA -- (MARKET WIRE) -- 03/19/12 -- Ultra wealthy Americans say work ethic is the key to achieving wealth, but it takes innovation to sustain it according to a poll released today by SEI (NASDAQ: SEIC). The poll revealed that while the overwhelming majority of wealthy individuals (80 percent) believe work ethic was either very important or the most important quality in achieving their financial success, nearly all of those polled (95 percent) agreed that innovation is important to their families' ability to continue being successful. The results point to the realization among wealthy families that sustaining wealth for multiple generations requires an ability to adapt to changing conditions and, at times, reinvent business or financial strategies. The survey, of more than 100 individuals representing families with more than $20 million in financial assets on average, was carried out by independent research firm Scorpio Partnership.

While the results clearly suggest that innovation is important to sustaining wealth over the long-term, respondents were mixed on where they expect innovation to come from related to their families' wealth creation. Nearly half of those polled (41 percent) believe professional advisors are the most likely source of innovation, while just more than a third (37 percent) expect innovation to come from those in business, and another third (36 percent) expect innovation to come from younger family members. Despite their expectation of innovation from professional advisors, the survey revealed that only two percent of respondents view wealth management as the most innovative industry. Although, only about a third of those polled (34 percent) said the wealth management industry is not very innovative.

"Wealthy families are craving new ways of communicating and collaborating with their advisors, and new strategies for building and sustaining wealth. After everything that's gone on in recent years, they understand that sometimes it takes a different approach to be successful," said Michael Farrell, Managing Director for SEI Private Wealth Management.

The survey showed that there is no real consensus among wealthy families on which areas of wealth management have seen the most innovation. Investment products were pointed to as the area that has seen the most innovation by 11 percent of respondents. According to the survey, investment advice was named as the area of wealth management that has seen the least innovation by 14 percent of those polled, followed by reporting (12 percent), and education and family communications (11 percent each).

The impact of innovation on wealth management is seen as very positive or mainly positive by 86 percent of respondents. Respondents pointed to better information and empowerment as the areas where innovation provides the most benefit.

The survey results suggest that while wealthy families view innovation as important, there's no real consensus on where it should come from or how it should be inserted into the wealth management process to achieve the most value. To help wealthy families gain a better understanding of the trends in and the practical applications of innovation SEI has identified some of the innovative practices that are emerging in the wealth management industry:

• Real-life advice
  While simple calculators and iPhone apps can calculate "your number" or compare refinancing terms, they have limited value. The more innovative firms combine technology and people to deliver robust "what-if" analysis to address real-life issues. What if my son gets divorced? What if our foundation makes one large donation every five years? These questions go beyond a simple online calculation. They require a combination of financial, behavioral and decision-making analysis.
  
  
• Designer investments
  While investment innovation is often described in terms like exotic, exclusive, and complex, the next wave will be defined by terms like objective-based, targeted, and risk-adjusted. Innovation in the investment space will be akin to the next wave of pharmaceuticals, where we'll see the end of the one-size-fits-all approach. Designer drugs of the future will be customized to match the patient's DNA in order to attack a specific cancer or other ailment. Wealthy investors are looking for the same "designer" approach to meet lifestyle, retirement, and charitable gifting objectives.
  
  
• Reporting progress to goals
  At a minimum, investors should expect access to balances and transactions records. Some savvy investors are getting full aggregation of all assets, whether liquid, non-liquid, cash, private or publicly held. But beyond aggregation, top firms provide reports that show progress to goals, compare spending and other key metrics, as well as track performance against personal benchmarks. Some reports allow the investors to see any overlap in portfolios managed by different investment managers.
  
  

The survey results are part of an ongoing series that SEI has developed in collaboration with Scorpio Partnership to help gain front-line insights on wealth goals, behavior, and issues of ultra-high-net-worth families. For more information about the poll, please email SEIPrivateWealth@seic.com.

About SEI Private Wealth Management
SEI Private Wealth Management provides clarity into the complex issues faced by wealthy individuals and families so they can make better decisions for themselves, their families, and their communities. In September 2011, SEI Private Wealth Management, formerly the SEI Wealth Network, was named to the National Association of Board Certified Advisory Practices' (NABCAP) Premier Advisor list, published by the Philadelphia Business Journal. SEI Private Wealth Management is an umbrella name for various life and wealth advisory services provided by SEI Investments Management Corporation (SIMC). SIMC is a subsidiary of SEI. For more information about SEI Private Wealth Management, visit www.seic.com/privatewealth.

About SEI
SEI (NASDAQ: SEIC) is a leading global provider of investment processing, fund processing, and investment management business outsourcing solutions that help corporations, financial institutions, financial advisors, and ultra-high-net-worth families create and manage wealth. As of December 31, 2011, through its subsidiaries and partnerships in which the company has a significant interest, SEI manages or administers $404 billion in mutual fund and pooled or separately managed assets, including $172 billion in assets under management and $232 billion in client assets under administration. For more information, visit www.seic.com.

Source: SEI

Released March 19, 2012