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Millionaires Report Average 4% Loss in 2008

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The high-net-worth feel pretty good about their advisors, reporting that they not only helped limit their investment losses in 2008, but by communicating with them during the worst days of the crisis helped them cope with that crisis. Those are the top-line findings of Fidelity’s 3rd annual Millionaire Outlook study, which was conducted online by a third-party research firm in February 2009 among 1,012 investors with at least $1 million in investable assets and released on June 29.

Among those respondents who said they worked with an advisor (Fidelity was not identified as the sponsor), the average investable assets declined by a reported 4%, compared to an 18% reported drop among those respondents who said they did not work with an advisor.

But the psychological benefit of having an advisor was just as important, the survey found, with 85% reporting that “contact with their advisor helped them feel more comfortable and better able to cope with the financial environment.”

Katia Walsh, VP of market research for Fidelity, said advisors play the role of “protectors,” and even “therapists” for their clients. In some ways, says Walsh, that goes against the grain, since many millionaires are self-made and “very independent,” yet the study shows that they increasingly are in need of what advisors can provide. “They need more advice than ever,” she says, and want “more frequent communication.”

As for the reported 4% drop in assets during a year when even many professional money managers lost upwards of 20% in their portfolios, Walsh cited three reasons: millionaires’ portfolios tend to be more diversified in general; some of their advisors foresaw the crisis and responded quickly by placing more assets early in safer sectors; and their portfolios tend to be more heavily in vested in international investments.