- Banned
- #1
Study performed by Hannah Shaw Grove, a managing director at Merrill Lynch Investment Managers. And: Russ Alan Prince, president of Prince & Associates.
I found this article because I was searching to find out how many people have become wealthy via the Internet. This article was written for wealth advisors, but it has interesting info.
I have questions:
1) What is the average age of these people?
2) How, exactly, did they make their money? What types of businesses do/did they run?
It's been two years since the Nasdaq topped 5,000 and dot-com millionaires were the undisputed heroes of the New Economy. Now the Nasdaq hovers around 2,000, most Internet entrepreneurs either are out of a job or reviled for having taken the money and run and the term “New Economy” is used as a punch line.
Research that we conducted this year, however, shows that while their financial priorities may have changed, e-millionaires — those who made $1 million or more through their direct involvement in the Internet (that is, not simply as an investor) — are still very much alive, well, wealthy and interested in high-end products and services. And their changing interest level in those various products and services can be seen as representative of the feelings of other affluent clients caught in the current
downturn.
Back in 1999, we conducted an extensive study of 652 e-millionaires with a total of $13.3 billion in assets. Importantly — and this explains why they're still around and investing — our e-millionaires had to have at least $1 million in investable assets on hand. They couldn't be paper millionaires whose wealth was based on stock options that have since proved worthless.
We found that, from the registered rep's standpoint, it was an attractive and intriguing group. Of the 652 e-millionaires we surveyed, nearly half had $10 million or more in liquid assets and one-third had more than $20 million. When measured by age, investment goals, or their feelings about financial professionals, the e-millionaires were very different from traditional affluent investors.
They were by and large much younger, having made their millions in a hurry. Based on their business experience, they had a high need for control and wanted any advisor they worked with to keep them informed every step of the way. Because they were new to being rich, they were also learning as they went and were very much aware of the importance of having advisors in their corner.
When asked about financial products, they were interested in moving assets into the higher end of the financial spectrum. Only 3.2 percent had money in a hedge fund, for instance, while 81.4 percent were interested. And just 8.3 percent had funds of funds while 69.6 percent were interested. On the flip side, 75.5 percent had money in mutual funds but only 16.6 percent were interested. They were ready to step up the ladder, product-wise.
When it came to financial advisors, most of whom came to them through peer referrals, the most important fact is that e-millionaires had an average of 4.7 advisors working for them. The combination of the amount of money, the relative lack of financial experience and the number of advisors per e-millionaire added up to an excellent opportunity for those advisors looking for wealthier clients.
As we learned in our more recent study, that opportunity remains. This year, we went back and interviewed 188 of the original 652 e-millionaires. Though the growth rate of new e-millionaires has understandably slowed, there are still by our analysis 8,364 e-millionaires in the United States who control slightly more than $300 billion in investable assets. We also found that the average number of investment advisors per e-millionaire has increased since our first study, rising from 4.7 to 5.1. Furthermore, nearly three-quarters of the group, 139 out of 188 e-millionaires, had changed their primary advisors in 2001. That doesn't mean that those advisors had been dropped; it just meant they were no longer controlling the highest percentage of client assets. The previous primary advisors had been moved from the starting lineup to the bench.
I found this article because I was searching to find out how many people have become wealthy via the Internet. This article was written for wealth advisors, but it has interesting info.
I have questions:
1) What is the average age of these people?
2) How, exactly, did they make their money? What types of businesses do/did they run?
It's been two years since the Nasdaq topped 5,000 and dot-com millionaires were the undisputed heroes of the New Economy. Now the Nasdaq hovers around 2,000, most Internet entrepreneurs either are out of a job or reviled for having taken the money and run and the term “New Economy” is used as a punch line.
Research that we conducted this year, however, shows that while their financial priorities may have changed, e-millionaires — those who made $1 million or more through their direct involvement in the Internet (that is, not simply as an investor) — are still very much alive, well, wealthy and interested in high-end products and services. And their changing interest level in those various products and services can be seen as representative of the feelings of other affluent clients caught in the current
downturn.
Back in 1999, we conducted an extensive study of 652 e-millionaires with a total of $13.3 billion in assets. Importantly — and this explains why they're still around and investing — our e-millionaires had to have at least $1 million in investable assets on hand. They couldn't be paper millionaires whose wealth was based on stock options that have since proved worthless.
We found that, from the registered rep's standpoint, it was an attractive and intriguing group. Of the 652 e-millionaires we surveyed, nearly half had $10 million or more in liquid assets and one-third had more than $20 million. When measured by age, investment goals, or their feelings about financial professionals, the e-millionaires were very different from traditional affluent investors.
They were by and large much younger, having made their millions in a hurry. Based on their business experience, they had a high need for control and wanted any advisor they worked with to keep them informed every step of the way. Because they were new to being rich, they were also learning as they went and were very much aware of the importance of having advisors in their corner.
When asked about financial products, they were interested in moving assets into the higher end of the financial spectrum. Only 3.2 percent had money in a hedge fund, for instance, while 81.4 percent were interested. And just 8.3 percent had funds of funds while 69.6 percent were interested. On the flip side, 75.5 percent had money in mutual funds but only 16.6 percent were interested. They were ready to step up the ladder, product-wise.
When it came to financial advisors, most of whom came to them through peer referrals, the most important fact is that e-millionaires had an average of 4.7 advisors working for them. The combination of the amount of money, the relative lack of financial experience and the number of advisors per e-millionaire added up to an excellent opportunity for those advisors looking for wealthier clients.
As we learned in our more recent study, that opportunity remains. This year, we went back and interviewed 188 of the original 652 e-millionaires. Though the growth rate of new e-millionaires has understandably slowed, there are still by our analysis 8,364 e-millionaires in the United States who control slightly more than $300 billion in investable assets. We also found that the average number of investment advisors per e-millionaire has increased since our first study, rising from 4.7 to 5.1. Furthermore, nearly three-quarters of the group, 139 out of 188 e-millionaires, had changed their primary advisors in 2001. That doesn't mean that those advisors had been dropped; it just meant they were no longer controlling the highest percentage of client assets. The previous primary advisors had been moved from the starting lineup to the bench.
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