This year has been, and will continue to be, fraught with political debate. Drawing lines and choosing sides will dominate much of the discussion of pundits, and cable news shows, even after the Democratic and Republican National Conventions this Autumn. Americans are identifying themselves as Democrat, Republican, Independent, and the broader definitions of Conservative and Liberal. Spectrem’s new Perspective™, Future Trends in Wealth Management found that there are definite differences between these two latter groups not just politically, but in terms of how they feel about investing, especially international investing.

HNW Investor attitudes regarding international investments range from the idea that these investments are too risky to that belief that they have much greater potential than traditional investments or other “alternative” investments. It is important for advisors and advisory firms to understand the attitudes of each investor regarding these investments. In the mind of the wealthy investor, another “alternative” way to invest their money is internationally. While this does not meet the strict industry definition of “alternatives”, many individuals see this as a new opportunity, beyond their traditional domestic investments.

Though 69% of Liberals and half of Conservatives cite investing in a country with no human rights violations as important to them, ironically, 30% of investors surveyed find China the most appealing for international investments. This despite the fact that China is not free of these violations. Clearly there is a disconnect between intentions and actions especially when potential profit is at hand.

Keeping in mind the differences in international investing preferences between Liberals and Conservatives, as well as how those differences extrapolate into other areas can help an advisor develop a successful strategy with their clients. Also remembering the gap between perception of issues, like human rights violations, and the reality of actual investing is also important.

Educating clients on some of the complex aspects of international investing is a good way to assuage their fears about what they may see as an “alternative investment.”

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