The report reveals how investors in the UK with average liquid assets of £4 million reacted to the credit crunch. Those surveyed own investments worth a total of £2 trillion, or two thirds of the UK’s total £2.9 trillion of liquid investments that lie in private hands. As a result, their investment behaviour has a huge impact on the performance of all the UK’s financial markets.

The January 2009 report The Impact of the Credit Crunch on HNW & Ultra HNW Investment Ownership and Allocation is based on a sample survey of 150 private HNW and UHNW investors.

Surprisingly, most HNW and UHNW individuals took no action at all in the past 12 months to lessen the impact of the credit crunch on their wealth. This lack of activity is entrenched within the HNWs, less so within the UHNWs, who average £10 million in liquid assets. But even within this elite group less than two thirds acted to protect their wealth, the survey found.

This lack of action results from a mix of apathy and lack of professional advice, the report said. Many HNWs and UHNWs take no professional investment advice and this stayed true throughout 2008 despite the financial turmoil. Those who took advice were far more likely to take action and, as using professional advisors is more common amongst UHNWs than amongst HNWs, this led to more of the former taking action to protect their investments.

"We found it truly surprising that so many of Britain’s wealthiest investors have taken little or no action to protect their wealth. There are two reasons for this: firstly apathy, mostly stemming from a lack of investment knowledge and ability, but often masquerading in the minds of the wealthy as “caution”; and secondly lack of professional advice.  Those taking professional advice – just over half – have acted much faster, indicating that it’s this inability to know what to do that drives inaction," said John Clemens, managing partner of Tulip Financial Research.

"Many of the wealthy are new to wealth and just do not know where trustworthy professional advice can be found," he added.

Although many of UK’s wealthiest investors have remained relatively inactive when faced by the credit crunch, those that did decide to move have shifted into cash and away from what they consider risky investments. Other changes included a retreat from unit trusts. The allocation to unit trusts has fallen by over 30 per cent, partly compensated for by increases in allocations to investment trusts and other safe havens like absolute return or strategic bond funds.

Also significant was the tendency to move away from complex, convoluted investments like structured products and other similar instruments. This has been fuelled by investor cynicism about banks’ abilities to invent safe, viable products of this type.

There was also a surprising rise in the allocation to residential and commercial property as opposed to property funds. This was not the result of of active investor intentions but results from the lack of short term liquidity for these kinds of investment.

“Much can be done to protect wealth from today’s ravages as is shown by the actions of the active wealthy investors. This report should be a call for more proactive marketing from professional wealth advisors seeking additional business. Is this perhaps an opportunity for wealth professionals now seeking new careers as a result of the financial downturn?” asked Mr Clemens.