FOX Survey: HNW Families Confident in Economy and Financial Markets

FOX conducted the survey in the second quarter of 2011. The investable assets of respondents averaged $338 million.

Following are other key findings:

• Although they are feeling more confident today than during the past two-to-three years, some 40% of respondents consider “loss of capital” as the chief risk facing their families in 2011. They are also worried about liquidity risks, inflation, the U.S. economy, government policies and geopolitical risks.
• Many families are adjusting their investment philosophy and asset allocation to ensure greater liquidity. Nearly one in five family offices is pursuing a more conservative approach to investing, and about 10% are shifting from U.S.-centered assets.
• Changes in sentiment and investment philosophy are also influencing asset allocation. Fifty-two percent of respondents plan to decrease their allocation to cash over the coming year, compared with only 9% who intend to increase their cash holdings. About half expect to increase their allocation to international equities in the next 12 months.
• The survey suggests that families will make significant changes to their network of external advisors. Fifty-nine percent of respondents are looking for an alternative investment manager, and 49% are in the market for a traditional investment manager. More than a quarter are seeking outside help from an investment consultant. And sizable minorities of families plan to end an existing relationship with an advisor.