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Nomadic wealthy see different investment opportunities

The nomadic lifestyle of the modern high net worth individual is one of the biggest influences on their investment and charitable giving patterns, according to research by the wealth management division of Royal Bank of Canada and the Economist Intelligence Unit.

The nomadic lifestyle of the modern high net worth individual is one of the biggest influences on their investment and charitable giving patterns, according to research by the wealth management division of Royal Bank of Canada and the Economist Intelligence Unit.

The study found 48% of "internationally mobile wealthy individuals” – defined as people who “live, work or spend more than half their time outside their home country” – were more like to invest the majority of their income in their country of residence, compared to 32% in their place of origin.

Mary Zimmer, head of international wealth-US at RBC Wealth Management, told CampdenFB: “IMW individuals attribute some of their success to mobility itself, with nearly all saying that a global lifestyle has broadened their horizons and created significant wealth and opportunity for them. Among these are investment opportunities uncovered in their countries of residence.”

However, there were nationalities that bucked this trend – notably Indian IMW individuals, with 68% investing primarily in India, possibly because many still held residency there.

The study also found that IMW individuals were twice as likely to invest in countries outside their origin or residence than those who remained living in the country they were born in – at 20% compared to 9%.

For the report, entitled Wealth Through the Prism of Culture and Mobility, the EIU surveyed 558 individuals with investable assets of at least US$1 million (€764 million), 300 of which come under their classification of IMW individuals.

The majority (60%) of IMW people surveyed had built their fortunes outside their country of origin, many leaving their homes for reasons such as higher quality of life (88%) and greater opportunity (79%).

Having moved for political stability and opportunity, the study said IMW individuals were often unwilling to risk their security on high-growth investments. Instead, they wanted steady growth (55%) or asset preservation (22%) from their investments. Only 14% looked for high-growth investments.

When it came to philanthropic decisions, the nomadic wealthy's strong links to their adopted countries played a big role with these countries receiving 50% of their charitable donations. But heritage was also a powerful force – 34% of IMW people gave mainly in their birth countries.

However, country of origin had a bigger influence on estate planning. Zimmer said the majority of IMW individuals were planning on leaving money “to family or a combination of family and charitable organisations in their country of birth”.
 

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