New research on the habits of Americans who espouse typical middle-class values but have assets of more than $1 million show these people have a distinctly different set of beliefs, attitudes, and behaviors involving work and wealth-building than other Americans. As described in the book The Middle-Class Millionaire, written by Russ Alan Prince and Lewis Schiff, this wealthier group of survey respondents worked longer hours and made greater efforts at networking than did the other members of the middle-class. These “Middle-Class Millionaires” were also much more likely to ascribe their success to such factors as “gaining a financial stake in my work,” “knowing many people,” “learning from setbacks and failures,” and “choosing a career on the basis of its financial rewards.” These attitudes and competencies, which we group together under the rubric of “Millionaire Intelligence,” can be summed up as four essential qualities: hard work, networking, enlightened self-interest, and self-efficacy.
Like all good studies, the survey that defined Millionaire Intelligence raised almost as many questions as it answered. We came to wonder what we might discover by surveying the values, attitudes, and work habits of investment advisors. What might such a survey reveal about the markers of success within this one particular field? Since all investment advisors, regardless of income, work in financial services, would the qualities of Millionaire Intelligence register more commonly among them? Or would Middle-Class Millionaire advisors–those possessing a net worth between $1 million and $10 million–demonstrate higher levels of hard work, networking, self-interest, and self-efficacy than those with less than $1 million in assets? Either way, the results would help reveal whether Millionaire Intelligence is generally a function of occupational choice, or more likely serve as a reliable predictor of success across all occupations.
More specifically, by testing the Millionaire Intelligence of investment advisors, we saw an excellent opportunity to learn more about just what it takes to succeed as an investment advisor. By cataloguing the extent to which millionaire investment advisors think and act differently from aspiring investment advisors, we could identify a strong set of evidence-based recommendations that would help guide all investment advisors to improve their performance.
Prince & Associates, Inc. surveyed 536 investment advisors, chosen at random and contacted by phone, from major metropolitan areas all over the U.S. The results were statistically weighted and controlled for age, length of time in the business, geography, education, and gender so that the sample would accurately reflect the makeup of the nation’s approximately 500,000 licensed financial advisors. We restricted participation to experienced advisors and excluded those with less than five years in the business, as well as any advisors who reported drawing less than 75% of their revenue from investment products. Finally, since we are interested in the attitudes and behaviors that contribute to financial success, we excluded any investment advisors who reported significant inherited wealth.
The advisors were offered a set of 24 questions, which fell broadly into two categories. The first category included questions that tested attitudes and beliefs about work and money, and asked them for an assessment of relative importance of various factors that contribute to success. The second category dealt with measurable behaviors or events. The advisors were asked to estimate, for instance, how many hours they work each week, their annual number of vacation days, and how many times they have experienced serious career or business setbacks.
Of the 536 advisors, a total of 84% reported net worth below $1 million. This group we have called “aspiring” advisors. The remaining advisors reported net worth ranging from $1 million to $10 million. These we have defined as Middle-Class Millionaire advisors, or MCM advisors.
How MCM Advisors Are Different
Despite some important areas of agreement, the survey showed that Middle-Class Millionaire advisors often exhibit very different attitudes and work priorities than most aspiring investment advisors do.
Attitudes toward wealth: One area of profound agreement is that the vast majority of both groups do not consider themselves “financially wealthy today.” In fact, members of the richer group were less likely to say they are wealthy! Just 4% of MCM advisors said they are wealthy, while 14% of aspiring advisors, those with assets under $1 million, said they are wealthy. We found, as you might expect, that members of the two groups have very different ideas of what constitutes “wealth.” Among MCM advisors, the mean was a net worth of $28.2 million and the median was a net worth of $17.4 million “in order to feel wealthy.” Among aspiring advisors, the goal was much lower. The mean was $6.3 million and the median was $4.4 million in net worth.
Attitudes toward work: We found significant differences among the advisors in describing those things that are “very or extremely important in achieving financial success.” Middle-Class Millionaire advisors place a higher value on having access to many people. By a margin of 87% to 59%, MCM advisors were more likely than aspiring advisors to cite “knowing people who know many people” as important to success. Middle-Class Millionaire advisors were dubious, however, about the value of “making an effort to work with ‘good people.’” Just 35% of them saw the value in that, compared to 67% of aspiring advisors.
Middle-Class Millionaire advisors are far more likely to think in terms of their direct self-interest. About 93% of them pointed to “when negotiating, coming out a ‘winner’” as being important to success. More than 82% of MCM advisors described their most common negotiating approach as “do whatever you need to do to win,” compared with 63% of aspiring advisors. Just 17% of Middle-Class Millionaire advisors agreed that “negotiations should always be win-win,” while 32% of aspiring advisors favored that approach. The Middle-Class Millionaire advisors were also much more likely to agree with the importance of “obtaining an ownership stake in your work,” by a margin of 91% to 69%. About 64% of Middle-Class Millionaire advisors said that “taking advantage of weakness in others” is important, a statement only 32% of aspiring advisors agreed with. More than 53% of Middle-Class Millionaire advisors agreed that “at times, you have to bend the rules,” versus 35% of aspiring advisors. Among MCM advisors, 45% agreed that “believing you have to be Machiavellian to succeed” is important, while just 26% of aspiring advisors made the same assessment.
Middle-Class Millionaire advisors are more likely to see the value of taking risks and learning from setbacks. Almost 87% of Middle-Class Millionaire advisors said that “learning from bad business or career decisions” is important to their success. Only 53% of aspiring advisors felt the same. More than 64% of Middle-Class Millionaire advisors claimed that “choosing projects with greater risk and greater prospective reward” is important, a statement that just 42% of aspiring advisors agreed with. Almost 48% of MCM advisors said that “leaving a career that was personally or financially rewarding in order to pursue greater financial success” has been important to them, compared to just 30% of aspiring advisors. And yet 43% of aspiring advisors said that “putting your own capital at risk” is important, an idea that just 26% of Middle-Class Millionaire advisors agreed with.
Attitudes toward money and success: With some very notable exceptions, there were broad areas of agreement among all advisors regarding their values and ideas about getting ahead. Nearly all investment advisors have remarkably similar attitudes about the importance of hard work, persistence, and related values. Nearly all advisors (95%) agreed that “anyone can become a millionaire if he or she works hard enough.” Between 81% and 91% of all advisors agreed that “choosing a career for its prospective financial rewards,” that “seeing things through,” and “the ability to build rapport with other people” are important to achieving financial success. Only 1% of Middle-Class Millionaire advisors said that “Doing what you love and allowing the money to follow” is important, while 27% of aspiring advisors agreed with that statement.