High Net Worth Individuals Keep More than One-Quarter of their Holdings in Cash

Globally, HighNet Worth Individuals (HWNIs) hold more than a quarter of their assets in cash and cash equivalents. That’s what first caught our attention when we read the 2018 CapGemini World Wealth Report when it was released in June. The report, recognized industry-wide as a bellwether for wealth management trends, went on to say that, in the US, HWNIs hold 22.3% of their assets in cash and cash equivalents. That’s second only to equities (37.1%) and eclipses all other asset classes: fixed income (18.1%), real estate (12.4%), and alternative investments (10.1%). 

While the report also showed that wealth managers again performed strong in 2017, delivering returns that surpassed 27%, we felt that it presented an opportunity – one where HNWIs were seeking added security for at least one-quarter of their assets. Perhaps it’s a rainy day fund to prepare for the next market correction, or some form of self-insurance in case the current bull market (the longest in post-WWII history) finally starts to show its age and gives way to the next bear. While investor confidence remained robust at 74% into this month, according to the 2018 Main Street Investor Survey, that index has fallen 11% since this time last year.

For those looking to weather this storm, or the next one, by stowing cash in one account that offers FDIC insurance up to $50 million, we’re happy to be in the market and operational with our Fortress Account, the only product of its kind that’s available to HWNIs in the consumer banking market.