Comment: Cue conservatism from the rich
Luxury car sales dive in the US as the wealthy start to think hard about spending
A post yesterday on Robert Frank's Wealth Report blog for The Wall Street Journal revealed plummeting sales of super-luxury cars -- Bentley, Maybach and Rolls Royce.
According to the March sales report from Autodata, sales of the top marques were down 39% on the previous year, while luxury sports car sales fell 31%.
Frank talked to a Bentley salesman in Fort Lauderdale who observed that while the very rich might not be feeling too much pain from the slowdown in the US economy and the financial markets crisis, they are reining in spending nevertheless.
Conservatism is the order of the day and it is likely to extend to all areas of wealth services, be it investments, property, holidays or shopping.
The recent decision of the UK's Queen to cancel a silver wedding anniversary party at London's Ritz hotel, being planned for her by friends, because it seemed inappropriate to display such extravagance during a tough economic times, may have displayed a somewhat warped sense of social justice.
But few wealthy people want to be seen as modern-day Marie Antoinettes.
Having a social conscience has become a badge of honour among the rich, as the boom in philanthropy shows.
Couple it with the pervading sense of doom about the global economy and one can only conclude that extravagance will be in short supply this year.
For wealth managers and private bankers, it will mean emphasizing a safety-first approach and preserving capital at all costs.
New business will still be there to be won. And to the conservative will go the spoils.
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