My colleague Kenny Tavares frequently gets tasked with creating reference resources for the team to use. He’s the Excel Guru and the Macros Whisperer, and the staff meetings when he demonstrates his latest efficiency tech-bit are always highly anticipated by all of us. This week Kenny shares some of background data he sourced for one of his latest automated worksheets. Enjoy! ~Helen
Oh Happy Day! You have been asked to assess the wealth of an individual and that person works for and sits on the boards of publicly-traded companies, has several real estate properties listed in their name, and a yacht-load of tangible assets. It couldn’t be easier and you display the calm of someone who has chosen an easy profession…and then you wake up.
Truthfully, on a good day, this scenario is not out of reach. However, on most days, we are dealing with prospects with a limited, incomplete number of visible assets. Being the professionals we are, we don’t like to take “no” for an answer. We have all gotten used to employing a number of tips and tricks to get what we want. At the end of the day, we can assemble a reasonable vision of a prospect’s visible assets.
However, we also know that there are hidden assets that hinder our ability to see a prospect’s true wealth. We know that high net worth individuals (HNWIs) keep a diversified portfolio of assets, but we lack access (“No, I can’t just search for their tax filings. Stop asking!”) and we lack cooperation (“Maybe we could just ask the donor about the size of their wealth,” said no one ever). If only we knew how HNWIs invest their money! Well, in a way, we do.
Because fortunately, wealth advisors face similar challenges. They need to understand wealth trends in relation to their client’s investment strategies. Better yet, their companies have the necessary resources to provide that insight for them in the form of studies and surveys. While these surveys are produced for general interest only, they are still very informative. The best thing about these surveys is that some of them are accessible to people just outside the wealth management industry — like prospect researchers.
Surveys dealing with wealth allocation are particularly useful for estimating wealth. If you have been in prospect research long enough, particularly in the Northeast, you have likely seen the excellent workbook produced by Elizabeth Crabtree and her then-team at Brown University. We were all very lucky that they were so willing to share it.
For the user, it is simple: enter a prospect’s visible assets in the appropriate fields and if the totals meet minimum criteria, you get estimates of a prospect’s wealth based on results from different surveys. From there, you use your best judgment to choose the most logical estimate and the spreadsheet provides their estimated giving capacity.
The Crabtree Worksheet, as we call it, is incredibly useful, but it has one flaw: it’s populated with static information.
Many of us received the workbook in the early-to-mid-2000s and since then, the data used to create its estimates has aged. While refreshing the data seems like the obvious solution, it’s not that simple. Some sources stopped updating their data altogether, while others put their reporting behind expensive paywalls.
So the time had come here at HBG to update our sources of wealth allocation and create a new resource worksheet for myself and the rest of the team — and that task was assigned to me.
Below, I’ve come up with a list of three resources you can access for free to begin creating your own worksheet. Aside from having the data we crave, these reports provide great information on current wealth trends.
Capgemini World Wealth Report
Capgemini is a Paris-based consulting, technology and outsourcing services firm with offices in 40 countries. The firm annually publishes the World Wealth Report, a comprehensive study of HNWIs (those with investable assets of $1 million or more, excluding primary residence, collectibles, consumables, and consumer durables), their wealth, and the economic conditions affecting them. The study is based on the responses of more than 2,500 people in 19 wealth markets in North America, Latin America, Europe and Asia-Pacific, all of whom work with wealth managers. The report includes a breakdown of financial assets in North and South America, Europe and Asia, including alternative investments, fixed income, real estate and cash & cash equivalents categories.
Knight Frank – The Wealth Report
London-based Knight Frank is a real estate consultancy firm that provides a range of residential and commercial sales opportunities, as well as investment and developments services. The firm has with 411 offices in 59 countries. Knight Frank annually publishes The Wealth Report, which reports on property trends and wealth.
Besides being an informative read, The Wealth Report features the results from the firm’s Attitudes Survey, which includes the responses of 10,000 people in Africa, Asia, Australasia, Europe, Latin America, the Middle East, North America and Russia. In the Survey’s property trends section, the firm breaks down asset allocation percentages for ultra-high-net-worth individuals (UHNWIs), people with a net worth of $30 million or more, excluding their primary residence. Its allocation categories include investments; real estate investments; personal business; primary residences and second homes; and collectables.
Tiger 21 Asset Allocation Report
The Investment Group for Enhanced Results in the 21st Century, aka Tiger 21, is a membership organization of HNWIs who have investable assets of more than $10 million. It provides a learning network that helps its 500+ members better understand issues such as wealth preservation, family-related challenges, estate planning options, philanthropic endeavors and legacy impact. Among the insights it provides, TIGER 21 issues a quarterly asset allocation report of its members. The report also includes data from previous quarters that reveal trends among this investor group. Its allocation categories include real estate; private equity; public equities; hedge funds; fixed income; cash & cash equivalents; commodities; and currencies.
What others do you find useful?
I hope these sources can help you provide much-needed context to your research and increase your knowledge of wealth trends in general. Have you found other sources for estimating wealth? What reports and surveys are you using? Please share your thoughts and suggestions in the comments section and let’s create a pool of great resources. Oh Happy Day indeed!