The wealthy are pretty happy, all considered

Elizabeth Waller

19 March 2006

But they fret about their kids and worry that their living standards could dip. It would seem that money does buy happiness, though not a whole lot and certainly not for an overwhelming majority of the wealthy. In fact, a new survey of Canadians worth at least C$10 million - $8.6 million in U.S. money - finds that slightly less than half of them are either ambivalent about or in clear disagreement with the statement "As I have happier."

Sensus, a Vancouver, British Columbia-based market-research firm, conducted the TrueWealth study late in 2005 for T. Stenner Group, an autonomous Vancouver-based multi-family office within CIBC Wood Gundy, the brokerage subsidiary of CIBC World Markets.

Fear for the kids

Although the 165 wealthy Canadians surveyed expressed satisfaction with aspects of affluence such as the ability to "provide advantages" for family members (ranked as the most important aspect by 30% of respondents), the freedom to live where and how one chooses (number two for 6%), and the benefit of "long-term security and peace of mind" (number three for 36%), more than two thirds of them said they were uneasy about their ability to maintain their living standards.

Richard Peterson, a psychiatrist and managing partner of Market Psychology Consulting (MPC), a San Francisco-based behavioral-finance firm that works with asset managers and private-client advisors, sees strong correlations between the TrueWealth report and data from his own surveys. Although the self-made rich generally feel more deserving of their wealth than those who have had it passed down to them, Peterson says his research suggests that fear of a come-down in life-style is more prevalent among those who have had to claw their way up.

The TrueWealth study also shows a prevalent fear of "affluenza" among respondents, with about a quarter of them worried that their children may prove shiftless because of family wealth. For self-made millionaires, the apprehension that their children may lack motivation or direction as a result of their family's success could be connected with the senior generation's desire to stay in control of the wealth they've worked hard to build - such people are simply apt to view everyone, especially their near and dear, as less capable than themselves. Meanwhile similar fears among those who have inherited or otherwise fallen into wealth may be based on personal experience.

"Heirs are often revenue coming form asset-based fees and retainers." He says the group provides investment and wealth-planning advice to about 30 families with an average net worth "approaching C$50million or more," and he expects that number to reach 55 to 60 such families "over the next three to five years." Stenner says the group makes a point of offering only non-proprietary managers from CIBC Wood Gundy's investment platform "to avoid potential or perceived conflicts of interest."

CIBC Woody Gundy and CIBC World Markets are part of Toronto, Ontario-based Canadian Imperial Bank of Commerce. -FWR