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Research Findings: How Executives Make Wealth Decisions

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A study of executives’ behaviors and preferences reveals how they make important wealth decisions.

Executives face unique wealth planning challenges and opportunities at each stage of their careers. From building a team of advisors and navigating company stock concentration to preparing for retirement, successful wealth management for executives requires comprehensive planning and continuous decision-making.

To understand how executives differ from other wealth owners when it comes to getting the right advice and information they need to make important financial decisions, Northern Trust surveyed 797 high net worth clients and prospects, then focused on the responses of those who self-identified as executives.

Knowledge Breeds Confidence

Executives are confident in their financial knowledge, more so than the broader population of $10M+ investors. Our research suggests that corporate executives feel well-educated when it comes to retirement planning and understanding the markets and the economy.

How corporate executives’ knowledge compares to other $10m+ investors

diagram_1920px_executive_decisions_research_chart_01 Economic & Market Commentary Investing Responsibly More Effective Charitable Giving Long-Term Care Planning Prep Your Family to Manage Wealth Retirement Planning Transferring Wealth to Family / Charity Portfolio Research Tax Planning 80% 90% 70% 60% 50% 40% 30% 20% 10% 0% Q: Please rate your knowledge level of each of the following financial topics Overall: Very or Moderately Knowledgeable Corp Executives: Very or Moderately Knowledgeable
diagram_768px_executive_decisions_research_chart_01 Economic & Market Commentary Investing Responsibly (Sri) More Effective Charitable Giving Long-Term Care Planning Prep Your Family to Manage Wealth Retirement Planning Transferring Wealth to Family / Charity Portfolio Research Tax Planning 80% 90% 70% 60% 50% 40% 30% 20% 10% 0% Q: Please rate your knowledge level of each of the following financial topics Overall: Very or Moderately Knowledgeable Corp Executives: Very or Moderately Knowledgeable
diagram_375px_executive_decisions_research_chart_01 Overall: Very or Moderately Knowledgeable Corp Executives: Very or Moderately Knowledgeable Economic & Market Commentary Prep Your Family to Manage Wealth More Effective Charitable Giving Transferring Wealth to Family / Charity Investing Responsibly (Sri) Retirement Planning Long-Term Care Planning Portfolio Research Tax Planning 80% 70% 60% 50% 40% 30% 20% 10% 90% 0% Q: Please rate your knowledge level of each of the following financial topics

Executives Study the Markets, Tax Planning and Wealth Transfer

Executives are comfortable doing their own research as it relates to their personal wealth. They regularly study economic and market developments and tax planning strategies.

Corporate executives have a strong interest in economic and market commentary, and becoming more knowledgeable about tax planning and effectively transferring wealth to family and charity.

Our research suggests executives seek but are not finding enough guidance on investing responsibly, planning for long-term caregiving to charity effectively and navigating the sale of a business.

Information corporate executives are looking for

diagram_1920px_executive_decisions_research_chart_02 Q: Q: When looking for financial education or information, how often do you access the following sources of information? Which of the following formats have been most useful when making financial decisions? Economic & Market Commentary Investing Responsibly (Sri) More Effective Charitable Giving Long-Term Care Planning Prep Your Family to Manage Wealth Retirement Planning Transferring Wealth to Family / Charity Portfolio Research Navigating the Sale of Your Business Tax Planning 60% 50% 40% 30% 20% 10% 0% Percentage of “Looked for” That Would Also like to Learn More Average for All Topics Looked For
diagram_375px_executive_decisions_research_chart_02 60% 50% 40% 30% 20% 10% 0% Economic & Market Commentary Investing Responsibly (Sri) More Effective Charitable Giving Long-Term Care Planning Prep Your Family to Manage Wealth Retirement Planning Transferring Wealth to Family / Charity Portfolio Research Navigating the Sale of Your Business Tax Planning Looked For Percentage of “Looked for” That Would Also like to Learn More Average for All Topics Q: Q: When looking for financial education or information, how often do you access the following sources of information? Which of the following formats have been most useful when making financial decisions?

Executives Rely on Advisors to Validate Next Steps

After reading financial news and insights, 65% of respondents called their advisor with questions and nearly half scheduled a meeting with their advisor. This suggests that corporate executives seek counsel on how new information and current events apply to them and what actions they should take given their own unique situations.

Actions taken as a result of receiving content

diagram_1920px_executive_decisions_research_chart_03 Q: Within the past 12 months, what action have you taken as a result of receiving content that provides financial advice from your advisor? Provided More Personal Information Scheduled Meeting with Advisor Called Advisor with Questions Purchased Product / Service Referred a Friend or Family Member 65% 31% 19% 27% 47%
diagram_768px_executive_decisions_research_chart_03 Q: Within the past 12 months, what action have you taken as a result of receiving content that provides financial advice from your advisor? Provided More Personal Information Scheduled Meeting with Advisor Called Advisor with Questions Purchased Product / Service Referred a Friend or Family Member 65% 31% 19% 27% 47%
diagram_375px_executive_decisions_research_chart_03 Provided More Personal Information Scheduled Meeting with Advisor Called Advisor with Questions Purchased Product / Service Referred a Friend or Family Member 65% 27% 31% 19% 47% Q: Within the past 12 months, what action have you taken as a result of receiving content that provides financial advice from your advisor?

Executives Seek a Quarterback for Their Team of Advisors

Over 85% of the executives we surveyed say they rely on their advisor to build a team of trusted professionals. They also use their advisor to evaluate their estate plans, keep their financial plans aligned with their goals, receive guidance on tax strategies and help provide financial education to their families.

Current and past service usage with a provider

diagram_1920px_executive_decisions_research_chart_04 All $25m+ Investors Corp Executives: $25m+ Q: In which ways has an advisor helped in the past, is currently helping, could help in the future, or has helped on an ongoing basis? Build Team of Trusted Advisors Provide Financial Education to You and Your Family Update Your Plan Around Financial Goals Assist in Major Career Transitions Evaluate Estate Plan Help Family Align on Values for Wealth Advice on Tax Strategies Navigate A Significant Life Event Manage Liquid / Specialized Assets Plan for Long-Term Care 80% 100% 60% 40% 20% 0%
diagram_768px_executive_decisions_research_chart_04 All $25m+ Investors Corp Executives: $25m+ Q: In which ways has an advisor helped in the past, is currently helping, could help in the future, or has helped on an ongoing basis? Build Team of Trusted Advisors Provide Financial Education to You and Your Family Update Your Plan Around Financial Goals Assist in Major Career Transitions Evaluate Estate Plan Help Family Align on Values for Wealth Advice on Tax Strategies Navigate A Significant Life Event Manage Liquid / Specialized Assets Plan for Long-Term Care 80% 100% 60% 40% 20% 0%
diagram_375px_executive_decisions_research_chart_04 All $25m+ Investors Corp Executives: $25m+ Build Team of Trusted Advisors Provide Financial Education to You and Your Family Update Your Plan Around Financial Goals Assist in Major Career Transitions Evaluate Estate Plan Help Family Align on Values for Wealth Advice on Tax Strategies Navigate A Significant Life Event Manage Liquid / Specialized Assets Plan for Long-Term Care 80% 100% 60% 40% 20% 0% Q: In which ways has an advisor helped in the past, is currently helping, could help in the future, or has helped on an ongoing basis?

Advisors Must Continually Earn Executives’ Trust

Corporate executives continuously review their managers, and that extends to their advisors as well. Ongoing performance, not the longevity of a relationship, determines whether they will eventually become lifetime clients.

Once I have a trusted relationship with my advisor, I will work with them for life

diagram_1920px_executive_decisions_research_chart_05 Agree Neutral Disagree Strongly Disagree Strongly Agree Q: Once I have a trusted relationship with my advisor, I will work with them for life 21% 5% 7% 41% 32%
diagram_768px_executive_decisions_research_chart_05 Agree Neutral Disagree Strongly Disagree Strongly Agree Q: Once I have a trusted relationship with my advisor, I will work with them for life 21% 5% 7% 41% 32%
diagram_375px_executive_decisions_research_chart_05 Agree Neutral Disagree Strongly Disagree Strongly Agree 21% 5% 7% 41% 32% Q: Once I have a trusted relationship with my advisor, I will work with them for life.

Find the Right Advice

The Northern Trust Institute is dedicated to helping executives achieve more with their wealth through tailored strategies backed by research and innovation. With a deep pool of experts who specialize in working with executives, we can help you navigate across all aspects of your plan, from managing complex compensation to preparing your family to manage wealth. To learn more, request a meeting.

Dive Deeper

How Executives Manage Wealth

Download the full research report for more executive insights.

Executive

Find The Right Advice

Our advisors can help you navigate the complexities of executive compensation.

THE NORTHERN TRUST INSTITUTE

Proven Advice for Moments that Matter

Disclosures

This information is not intended to be and should not be treated as legal advice, investment advice or tax advice and is for informational purposes only. Readers, including professionals, should under no circumstances rely upon this information as a substitute for their own research or for obtaining specific legal or tax advice from their own counsel. All information discussed herein is current only as of the date appearing in this material and is subject to change at any time without notice. This information, including any information regarding specific investment products or strategies, does not take into account the reader’s individual needs and circumstances and should not be construed as an offer, solicitation or recommendation to enter into any transaction or to utilize a specific investment product or strategy.

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