Dearth of global worth seen in 2008

Global wealth slumped last year, led by a steep decline in North America, which saw assets under management drop 22%, to $29.3 trillion, from $37.4 trillion in 2007, according to a report released today by The Boston Consulting Group Inc.
Assets around the world fell 11%, the first decline since 2001, to $92.4 trillion in 2008, from $104.7 trillion in 2007, according to Boston Consulting’s report: “Delivering on the Client Promise: Global Wealth 2009.”
Wealth managers around the world also felt the pain as median pretax profit margins fell to 30% last year, down from 36.4% in 2007.
The only region in the world where wealth increased was Latin America, where assets under management grew 3% to $2.5 trillion in 2008, from $2.4 trillion in 2007.
“Wealth will begin a slow recovery in 2010 but may not reach its pre-crisis level until 2013,” Peter Damisch, a Boston Consulting partner and co-author of the report, said in a statement.
“We expect wealth to grow at an average annual rate of about 4% from yearend 2008 through 2013.”
The report predicted that assets in the Asia-Pacific region, excluding Japan, will increase 9.5% in the next five years, making it the fastest-growing region in the world.
Pressure is also mounting on offshore banking centers, according to Mr. Damisch.
“Once their tax and legal advantages evaporate, so too will their appeal,” he said.
“Being inconspicuous is a tenuous value proposition in an era of increasing oversight,” Mr. Damisch said in the statement.
Wealth managers have an opportunity to gain ground while assets and relationships are in play, but only if they define a clear value proposition, said Bruce Holley, a Boston Consulting partner and the other co-author of the report.
Wealth managers may attract clients by narrowing their product range, Mr. Holley said in the statement.
“They also need a more aggressive client-acquisition strategy — one that zeroes in on ‘dislocated’ wealth — in order to gain share in this market,” he said.