Habits and Values of HNW Individuals

Part
01
of one
Part
01

Habits and Values of HNW Individuals

Key Takeaways

  • 63% of HNW individuals surveyed said good health is the most important measure of personal success today.
  • Data shows that generosity is a value that is of key importance to HNW individuals, 90% give to charity annually, compared to 56% of Americans in general. Additionally, 86% of HNW individuals surveyed said they consider giving back to society either essential or important, with 54% saying it is absolutely essential.
  • A survey of over 1,200 Americans found that 67% of respondents feel first-class passengers receive better treatment than other fliers on board.
  • The first-class experience is considered to be luxurious because flying first-class provides passengers with a sense of prestige and hedonic wellbeing.

Introduction

This report examines the most important values to high-net-worth individuals, as well as the key reasons consumers choose first class air travel. This research has concluded that the most important values to HNW individuals tend to be trust & confidentiality, generosity, conservative political views, good health, and a familial support system; meanwhile, the key reasons consumers choose first class air travel is for extra space, to receive a higher quality of customer service, and to enjoy luxury experiences and accommodations.

Most Important Values to High-Net-Worth (HNW) Individuals

Trust & Confidentiality

  • Trust and confidentiality relate to the ideas of being able to rely on one's character and ability to be truthful, honest, and to maintain one's privacy.
  • Trust and confidentiality is a core value held among HNW consumers. This is exemplified by a survey of HNW individuals wherein trustworthiness was the number one most important factor the cohort looks for in a financial advisor (87%) while confidentiality came in second (78%).
  • The values of trust and confidentiality are especially important to HNW individuals as these factors play a key role in their day-to-day lives. For example, because HNW individuals have a lot of disposable income, they are bombarded by brands wanting them to buy their products; instead of relying on advertisements and sales pitches to make their purchase decisions, HNW individuals are much more likely to rely on people and experts they trust. Additionally, HNW individuals are much more likely to engage with brands they deem trustworthy, especially when it comes to buying luxury items and items where the price points are higher.
  • In particular, confidentiality is important to the HNW cohort because, as cybersecurity attorney, Mark Rasch, notes: "High net worth individuals tend to have a large amount of very sensitive and confidential information. Because their reputations are significant, even stuff that has no economic value can cause significant harm." HNW individuals are at a greater risk of having their electronic devices hacked; having bad actors attempt to access their confidential financial, medical and legal information, doxxing of themselves or their family members, risk of identity theft and fraud, and risk of extortion.

Generosity

  • According to Merriam-Webster, generosity is “the quality of being kind, understanding, and not selfish: the quality of being generous especially: willingness to give money and other valuable things to others.”
  • Data shows that generosity is a value that is of key importance to HNW individuals, 90% give to charity annually, compared to 56% of Americans in general. Additionally, 86% of HNW individuals surveyed said they consider giving back to society either essential or important, with 54% saying it is absolutely essential.
  • There are a few things driving this value among the cohort. According to one survey, 54% said they give based on their belief in the mission of the organization they are giving to, while 42% said they give because they want to make a difference. Additionally, 32% said giving allows them to experience personal satisfaction, enjoyment or fulfillment.
  • Psychologists note that wealthier individuals are "more likely to give money when presented with a request that appeals to their sense of independence and self-reliance."

Conservative Political Values

  • According to Lexico, conservatism is related to political views that favor "free enterprise, private ownership, and socially traditional ideas."
  • The majority (64%) of individuals earning over $200,000 per year vote in favor of Republicans.
  • This value appears to be driven by the socioeconomic standing of HNW individuals and their financial and business interests. Socioeconomic status is considered by academics to be a key factor that informs political attitudes and actions. This generally stems from the economic self-interest of the individual, wherein individuals prefer political policies that financially benefit them.

Good Health

  • Good health is a resource that allows an individual to function in society and provides one with the means to lead a full life with meaning and purpose. It relies on physical, emotional, and mental wellbeing.
  • 63% of HNW individuals surveyed said good health is the most important measure of personal success today.
  • 52% of HNW individuals surveyed said they are spending more on health, fitness and wellness in the past year than they have in previous years.
  • The drive for wealthy individuals to place a high value on good health appears to be connected to their desire to live longer lives and also to have a higher quality of life at the end of their lives. Among wealthy investors surveyed, 53% said they expect to live to 100-years-of-age, two decades longer than less wealthy respondents say they expect to live. Likewise, 90% of wealthy people surveyed said health is more important than building wealth, and HNW individuals report that they would be willing to pay one-third to one-half of their fortune to be able to add an extra decade to their life.

Familial Support System

  • A support system is defined as a network of people who provide an individual with support in a practical and/or emotional way.
  • 59% of HNW individuals surveyed said having supportive family and friends is the most important measure of personal success today.
  • Although it is likely that HNW individuals value their family connections for the same reasons people do in general, a driver of this value that is also tied to their economic status appears to be the way they are connected to their family through their wealth. For example, parents who have personal wealth must take into consideration the wealth they will pass onto their children and how they can ensure this wealth will have a positive impact on future generations; this is evidenced by the 90% of wealthy families who say they want to pass their wealth on to their predecessors. Additionally, families that have strong values tend to be wealthier and one survey of U.S. adults who have millions of dollars in investable assets found that family values are among the top three drivers of success and 80% of respondents said their parents were firm disciplinarians. These results are likely due to inheriting family values that build wealth and relate to older generations of family members teaching younger family members about fiscal responsibility and wealth building habits.

Knowledge

  • Knowledge is the condition of knowing something in a way that is familiar; this knowing is often gained through experience or by being associated or acquainted with a specific topical understanding or technique.
  • Among HNW individuals surveyed 77% said "knowledge" is the most important quality they seek in a financial advisor.
  • While many people equate higher education to wealth, despite this not necessarily being the case, wealthy people tend to equate wealth with seeking out specific types of knowledge. Wealthy people also have an understanding that creating wealth requires a team of knowledgeable people and that fortunes are build by relying on the collective mental contributions of others. Additionally, being able to think creatively and find solutions to difficult problems is a fundamental aspect of generating wealth.

Key Reasons Consumers Choose First Class Air Travel

Extra Space

  • Its common knowledge that first-class seating on airplanes provide substantially more space than general plane seating. First-class seating offers up to three times as much space compared to coach seating, depending on the overall size of the aircraft: this can mean as much as 1,600 square inches of space compared to 527 square inches of space.
  • Upon analyzing over 100 statements from first-class passengers about the best perks of flying first-class, the second most frequently given answer was "more space" with around 11% of statements agreeing with this, along with around 10% who commented on the ability to turn the seat into a bed (the fifth most frequently given answer).
  • During the pandemic, this perk of first-class flying became especially prevalent as 65% of travelers surveyed said the possibility of sitting next to someone infected with COVID-19 is a top concern, especially on longer flights.

Higher Quality of Customer Service

  • A survey of over 1,200 Americans found that 67% of respondents feel first-class passengers receive better treatment than other fliers on board.
  • Upon analyzing over 100 statements from first-class passengers about the best perks of flying first-class, the second most frequently given answer (tied with more space) was 'better treatment from staff' with around 11% of statements agreeing with this, along with around 9% who enjoyed the priority boarding and offloading that came with their first-class ticket, and 6% who remarked on the express check-in. Overall, these consumers liked that these aspects of customer service not only made them feel special (for example, when staff already knew their name and called them by it), but they also liked that they didn't have to deal with the long-lines, wait-times and stress that comes with general airline travel.
  • A survey of airline passengers found that consumers feel airline customer service has generally been on the decline. Although airline operations have been noted as improving overtime, the overall customer experience of flying is not. This is important to note, as customer service is one of the most highly ranked areas of importance among airline passengers, which may explain why this aspect of first-class travel is such a key motivator of first-class ticket purchases.

Luxury Experiences & Accommodations

  • The first-class experience is considered to be luxurious because flying first-class provides passengers with a sense of prestige and hedonic wellbeing.
  • Upon analyzing over 100 statements from first-class passengers about the best perks of flying first-class, the number one most frequently given answer was 'better food' with 16% of statements agreeing with this. In relation to this, many people commented on the high-quality of the food itself, the high-quality of the dining utensils and presentations, the variety of menu items, and the ability to order what they wanted, when they wanted. Other aspects of the luxury accommodations enjoyed by first-class were also commented on, including free and unlimited drinks (10%), access to a personal TV, charging station, and noise canceling headphones (7%), free comfort items such as pajamas, high-quality pillows and blankets (7%), and access to first-class lounges (7%).
  • This reason is likely driven by the same reasons consumers enjoy luxury experiences and goods in general: they can increase one's self-esteem, provide a sense of belonging, provide a sense of accomplishment, allow them to feel rewarded, and the ability to "show-off" or feel superior (some passengers commented on the enjoyment they got when economy passengers gave them envious looks as they boarded).

Research Strategy

To conduct research on the most important values to HNW individuals, we collected data from surveys of this cohort that were relevant to their values and then backed this data up with insights from academic reports and insights from experts which helped to illustrate the likely motivations and reasoning behind these values. It should be noted here that "most important values" were defined as values that can logically be assumed to be highly essential and critical to a HNW individual's day-to-day life and those which were being reported by a majority of HNW individuals via surveys.

To conduct research on the key reasons consumers choose first class air travel, we again sought out consumer surveys that we hoped would quantify the top reasons for these choices. Unfortunately, after exhaustive research, no such surveys were found to be publicly available, which was quite unexpected. One reason for this lack of data appears to be that most consumer surveys related to air travel focus on passengers in general rather than focusing on the individual classes of passengers. Additionally, while some academic studies have been done, the vast majority of these were found to be pay walled, which is a common occurrence when it comes to data about luxury markets. Despite this, during the research, we noted that there was an abundance of qualitative information being published by travelers about the benefits and reasons for flying first class. Therefore, we triangulated an understanding of these reasons by collecting and analyzing statements from first-class passengers published in a consumer forum about the top benefits of first-class flights. In doing so, over 100 statements were collected and organized categorically (in this spreadsheet) to determine which aspects of first-class travel consumers mentioned most frequently. This analysis made it very clear which aspects of the first-class experience were the most highly regarded and sought after.
Sources
Sources