Morgan Stanley finds high-net-worth individuals contented

By Bill Fallon

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A raft of statistics from Morgan Stanley, with investment offices in Stamford, Greenwich and Purchase, paint a picture of financial strength among the tristate region’s high-net-worth individuals with nearly nine in 10 planning to stay put.

Yet, in a region internationally known for seemingly entire towns of high-net-worth families, local economies were viewed less favorably than their national counterparts by 9 percentage points.

The survey said, “Despite the generally high taxes on income, property and retail purchases in the New York metropolitan region, the vast majority (89 percent) of the area’s high-net-worth investors have not changed, nor have they started the process to change, their state of residence for the purpose of reducing their tax burden.

The Morgan Stanley Wealth Management Survey found widespread confidence, saying, “Amidst continued strong performance by the U.S. stock market, 71 percent of high-net-worth investors nationally surveyed believe the U.S. economy will be the same or better 12 months from now and 87 percent nationally have a similar outlook for their local economy. In the tristate region (New York City metropolitan area, New Jersey and Connecticut), those figures are higher with respect to the national economy (77 percent), but lower with respect to the local economy (78 percent).

Citing national data that show only 15 percent of workers have reached their planned retirement benchmarks, Morgan Stanley said, nonetheless, 82 percent of workers regionally are comfortable with their retirement plans, in keeping with a national percentage of 85 percent.

Investors are bullish on the prospects for their own investment portfolios, the survey reported. Nationally, 90 percent foresee their investments performing the same or better a year from now. That figure matches the tristate region’s 89 percent who expect their investment portfolios to be better or the same in the next 12 months. Seventy-six percent expect the overall investment climate will improve or stay the course.

“While investors clearly are feeling the benefits of two consecutive years of strong performance in U.S. equities, the debate continues over the length and durability of the current bull market and the impact and timing of higher interest rates,” said Gregory J. Fleming, president of Morgan Stanley Wealth Management and Morgan Stanley Investment Management, in a statement. “It’s no surprise, then, that two-thirds of high-net-worth investors say they rely on a financial professional for advice and guidance.”

Fleming joined the company in 2010. Besides a corporate investment background, he was a senior research scholar and distinguished visiting fellow of the Center for the Study of Corporate Law at Yale Law School in New Haven.

Of eight major geographic cohorts, the tristate region was last in investment portfolio bullishness in the Morgan Stanley survey. The data showed 95 percent of Los Angeles investors are bullish, followed by 93 percent in Houston, Chicago and Atlanta, 92 percent in Denver and San Francisco, 90 percent in Boston and 89 percent in tristate/NewYork City area.

Regarding the regional economy, the tristate region’s 78 percent bullish rating for the next year placed it last among the survey’s reported markets. Houston was first with 96 percent bullish rating, followed by San Francisco at 91 percent, Denver and Atlanta at 90 percent, Boston at 88 percent, and Chicago and Los Angeles at 85 percent.

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About the author

Bill Fallon
Bill Fallon is editor of the Fairfield County Business Journal. He has worked at Westfair Communications for more than five years, previously editing an upstate New York daily and a national motorcycle magazine in Nevada. He attended Iona Prep in New Rochelle, N.Y., and the University of Virginia.

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