Fortune posted an interesting article on home and car ownership of Ultra High Net Worth Individuals (UHNWI). A study by AIG reveals that UHNWIs own 9 homes and 19 cars. One thing to note, the 19 cars are cars which are driven, not collector cars, and the 9 homes, are home owned outside of the U.S., only overseas homes. They also had an average of nearly $20 million in insured fine art, and spent more than $250,000 annually on insurance premiums.
As appraisers, we should all be targeting HNWIs and UHNWIs as clients when possible, as there is a strong need for property valuations and the wherewithal to pay for qualified appraisals. Of course one way to target that market is to work with banks and wealth managers. This is part of the strategy we have taken at TAFAC with the recent presentation at US Trust, the wealth manage division of Bank of America.
The appraiser profession should continue to push for high standards and qualifications, and while some may complain, we need to move away from those who are not qualified and do not write to exacting societal standards. It bothers me when I see appraiser promotions which are incorrect and misrepresent credentials and experience, as well as the many low-brow promotional campaigns geared toward the lowest common denominator. It hurts us all and breaks down all of the hard work and efforts undertaken to truly make personal property appraising a respected and recognized profession.
Fortune reports on UHNWIs
Source: FortuneThat the average number of residences and vehicles owned by the average “ultra-high net worth” individual, according to a new study from AIG, which detailed the assets of the insurance company’s richest U.S. customers. They also have an average of $19.6 million in insured fine art. What’s more, the nine homes doesn’t include any property they may own in the U.S., investment or otherwise. AIG only asked about property overseas. Also not included in that tally: Collector’s items. So those 19 cars are vehicles that the billions are actually driving around, or their drivers do.
AIG declined to say exactly how much these individuals were worth. But the company said that the survey included AIG clients who spent more than $250,000 on insurance premiums a year. A spokesperson said that the survey polled several hundred clients—including 40% of the Forbes 400 Wealthiest Americans. The wealth of the Forbes 400 wealthiest ranges from $1.7 billion to $81 billion, with a median net worth of around $3.2 billion.
The top 0.01% of Americans had average net worth of $371 million in 2012, according to a 2014 study from economists Emmanuel Saez and Gabriel Zucman.
Of the homes owned overseas by the high net worth clients, the most, 14%, were in Mexico. But it’s probably not a surprise that many of the homes were located in tax-friendly locations, like the Bahamas, 13%, and other parts of the Carribean, 9%. Another 12% were situated in England, and another 9% in France.
AIG said it could not comment as to whether the clients had bought these properties for leisure, business, or perhaps to offshore their assets for tax purposes.
The survey comes as the wealth inequality gap in the U.S. has been steadily widening. Ultra-wealthy Americans, the 0.01%, accounting for about 16,000 families by Saez and Zucman’s estimates, control about 11.2% of the total wealth in the U.S. That’s up from 5% in 1995.
Earlier this year, home ownership in the U.S. dropped to 62.9%, the lowest rate since 1965. Earlier this week, the Federal Reserve announced that the number of subprime auto loans in delinquency was at its highest rate since 2010.