State of U.S. Wealth: More Millionaires, Bigger Wealth Divide, Finds Annual Phoenix Marketing International Wealth and Affluent Monitor News Release from PMI Social Media 02|16|2017 Ranking of millionaires by state shows greatest one-year gains in Utah, Michigan, Arizona and Ohio; Biggest declines in New Mexico, South Dakota, Vermont and Maine

Pre- and post-financial crisis analysis shows District of Columbia bounces, Dakotas rise while Arizona, Florida and Michigan fall sharply lower in rankings

Millennials moving into emerging wealth, gaining on Generation X Rhinebeck, NY – The number of millionaire households in the United States has grown by more than 800,000 over the past five years and by more than 1.3 million since 2006, before the financial crisis, according to the annual Wealth & Affluent Monitor published today by Phoenix Marketing International. The overall wealth market is growing, yet the ratio of millionaires to total U.S. households has remained relatively flat and wealth is more concentrated and shifting geographically. The 2016 Phoenix Wealth & Affluent Monitor shows that as of mid-2016: Nearly 6.8 million U.S. households, approximately 5.5 percent of all U.S. households, had $1 million or more in investable assets. This represents a 4 percent one-year increase in the number of millionaire households, or nearly one-quarter of a million more households than in 2015.

Over the past five-year and 10-year periods, the ratio of millionaire households to total U.S. households has remained relatively flat, up from 4.8 percent in 2006 and 5.1 percent in 2011.

Households with at least $1 million in investable assets hold approximately $20 trillion in total liquid wealth, or approximately 59 percent of total liquid wealth in the U.S.

Within the wealth segment, the greatest asset growth was among households with between $1 million and $10 million in investable assets. Their investable assets grew by $809 billion, to a total of $17.8 trillion.

By comparison, there are 16.4 million households in the broad affluent market (with between $250,000 and $1 million in investable assets). They control $8.5 trillion in investable assets, or 35 percent of total liquid wealth in the U.S.; however, they lost $56 billion collectively between 2015 and 2016. The vast majority of these losses ($54 billion) were among the lower mass affluent segment (households with $250,000 to $500,000).

The 14 million near-affluent households in the U.S. (with between $100,000 and $250,000), saw investable assets decline by $79 billion between 2015 and 2016, to $2.6 trillion.

The concentration of wealth in the U.S. continues to deepen as the top 1 percent of wealthiest U.S. households now holds 24 percent of liquid wealth. Non-affluent households, representing 70 percent of U.S. households, control less than 10 percent of the nation’s liquid wealth. “Our research reveals stark geographic, demographic and economic differences within the broad wealth and affluent market, reinforcing the need for more precise segmentation and targeted, relevant messaging,” said David Thompson, Managing Director, Affluent Practice, at Phoenix Marketing International. “The trends we’ve seen over the past 10 years show a deeper and wider wealth divide as families in the near- and emerging affluent segments fall further behind financially. State ranking of millionaires In 2016, there were few changes among the top 10 states ranked by the ratio of millionaire households to total households. The top 10 states are: Maryland (7.55%) – remained #1, where it has been since 2011 Connecticut (7.4%) – remained #2, unchanged in 2016 New Jersey (7.39%) – moved up one place in 2016 Hawaii (7.35%) – declined one place in 2016 Alaska (7.15%) – unchanged from 2015 Massachusetts (6.98%) – unchanged from 2015 New Hampshire (6.82%) – unchanged from 2015 Virginia (6.64%) – unchanged from 2015 District of Columbia (6.32%) – up one place from 2015 Delaware (6.28%) – down one place in 2016 A strengthening economy and employment expansion has contributed to rising personal wealth in some states, while others, hit hard by the recession and their reliance on certain sectors, are losing ground or recovering more slowly. The states with the greatest gains in the rankings are Utah (#17), Michigan (#29), Arizona (#30) and Ohio (#31), each of which rose five places from 2015. The biggest decline in the ranking was New Mexico, which dropped 11 places, continuing a three-year decline in ranking from #27 in 2013 to #43 in 2016, reflecting the impact of a depressed oil and gas industry on the state’s economy. South Dakota and Vermont both dropped seven places to #33 and #19, respectively, while Maine dropped six places to #35. An analysis by Phoenix reveals more significant shifts and regional impact of the financial crisis, recession and slow recovery of jobs and wages over the past 10 years. For example, Michigan ranked #18 in 2006, but by 2011 had dropped to #26 and, despite recent growth, ranked #29 in 2016.

Florida ranked #10 in 2006, but by 2011 had dropped to #19 and ranked #32 in 2016.

New York ranked #13 in 2006 but rose to #12 by 2011 before dropping to #18 in 2016 as the disparity in wealth, particularly between upstate and downstate, became more prevalent.

Meanwhile, the District of Columbia, which ranked #9 in 2006, dropped to #20 at the outset of the financial crisis but has bounced back to its pre-recession ranking at #9 in 2016. Other states, including North Dakota, South Dakota and Texas, have risen notably since before the financial crisis. Generational Wealth and Millennials Rising Approximately 70 percent of the wealth and affluent market is comprised of Americans age 52 or older who have at least $100,000 in investable assets. Baby Boomers account for more than half (55%) of the market while the Silent Generation represents 15 percent. Approximately 13 percent of the wealth and affluent market now is composed of the Millennial generation, who are age 36 or younger. They are gaining on the members of Generation X, which make up the remaining 17 percent of the market, and who are faced with financial challenges of aging parents and education costs for their children. Methodology The Wealth & Affluent Monitor (W&AM) sizing estimates in the U.S. are developed using a combination of sources including the Survey of Consumer Finance (SCF) as well as Nielsen-Claritas. The SCF provides the framework and allows us to determine the general distribution of households by their level of investable assets. Estimates are further refined using the age and income distributions provided by Claritas. Investable assets include education/custodial accounts, individually-owned retirement accounts, stocks, options, bonds, mutual funds, managed accounts, hedge funds, structured products, ETFs, cash accounts, annuities, and cash value life insurance policies. About the Phoenix Wealth & Affluent Monitor The Phoenix Wealth & Affluent Monitor (formerly Global Wealth Monitor) is a syndicated marketing research platform that tracks the needs, attitudes and behaviors of affluent and High Net Worth individuals in the U.S. and Canada. Market-sizing extracts provide of the number of affluent and High Net Households in the U.S. by state. State extracts provide market-sizing estimates for eight affluent and HNW market segments, for the overall state and by Core-Based Statistical Areas (CBSAs) within each state. Market-sizing extracts are available for purchase. About Phoenix Marketing International Phoenix Marketing International is a global marketing services firm, headquartered in Rhinebeck, New York, with 11 offices in the U.S. and Europe. Since 1999, the firm has provided companies across diverse industries with competitive insights on attitudes and behaviors, with a focus on customer experience, communications and brand/product innovation through extensive research experience in the automotive, financial services, healthcare, converged technology and media, restaurant and travel/leisure sectors. For more information, visit http://phoenixmi.com/. Follow Phoenix on Twitter @phoenixmktg.