Scandals Make Weathly Reluctant to Invest
A steady stream of financial mischief in corporate America has made some of the nation’s wealthiest citizens distrustful and wary of investing, a new poll revealed.
The survey, released Wednesday by wealth management firm United States Trust Co., polled 151 of the most affluent 1 percent of Americans who had either an adjusted annual gross income of more than $325,000 or a net worth greater than $5.9 million.
Among the findings reported:
- 79 percent "question the reliability" of corporate financial statements and do not trust equity analysts
- 67 percent do not trust corporate management
- 65 percent do not trust independent auditors
"There have been a number of scandals that have affected general investor confidence," the report said. "These scandals continue to have a profound impact on the investment attitudes of the affluent."
The poll said the 2000-2003 bear market has forced 32 percent of those surveyed to delay retirement, with 25 percent saying they would have to rely more heavily on Social Security.
And though the bear market is over—69 percent said the value of their investment portfolios had risen over the past year—few are moving their money back to equities.
"The anxiety levels of this group are quite high," said Paul Napoli, executive vice president of U.S. Trust. "They are conflicted. They believe times are getting better and there will be positive returns, and yet there is nervousness about what scandal is going to pop up next."
Voice of the Editor
Which isn’t completely true. I mean, occasionally I drop by when I manage to sneak out of the nonstop frat party over at Going Concern, but I’m mostly a wallflower over there. I’m happy to say that I’ve been given express permission (or explicit orders, if you like) to wander over here to AccountingWEB more often.
Why is that, you might ask? My job is to replace the irreplaceable Gail Perry as Editor-in-Chief. What does that mean? I don’t really know! I think it’ll be fun getting a feel for things, throwing in my own thoughts here and there, and listening to the discussions you’re having about the accounting profession.