Where do most of the wealthy live? These three countries
U.S., Japan and Germany have most HNWIs, new study finds; also, report says the rich getting, well, you know
The world’s wealthiest individuals are back in the black, according to the 15th annual World Wealth Report released this morning. The study and report is conducted by Merrill Lynch Global Wealth Management and consulting firm Capgemini.
At the end of last year, there were 10.9 million high-net-worth individuals worldwide — those with more than $1 million in investible assets — an increase of 8.3% from 2009. Their combined wealth totaled $42.7 trillion — 9.7% higher than the previous year. Both the number of “millionaires” and their total wealth now have surpassed pre-financial crisis levels in 2007.
The so-called ultrahigh-net-worth population — those with more than $30 million in investible assets — grew by 10.2% to 103,000 and their wealth grew 11.5%. They represent less than 1% of the global HNW population but account for 36.1% of the total wealth, or about $15.4 trillion.
Although the growth rates were much slower than those experienced after the dramatic rebound in global asset prices during 2009, the continuing improvement was welcome news to John Thiel, the recently appointed head of U.S. Wealth Management at Merrill Lynch Global Wealth Management. “We’ve had a volatile environment over the last four years,” said Mr. Thiel. “It’s refreshing to see that we’re continuing to plod along.”
The U.S. continues to have the most high-net-worth individuals with 3.1 million, representing over 28% of the world total. The three countries with the greatest number of wealthy individuals —the U.S., Japan and Germany, accounted for 53% of all HNWIs.
These wealthy individuals, according to William Sullivan, global head of market intelligence for Capgemini Financial Services, are particularly concerned with economic and tax-related issues. Capital preservation also remains a priority for them.
Nevertheless, the wealthy continued to reduce their allocations to cash and fixed-income instruments and increase their investments in equities. Cash and fixed-income assets as a percentage of their portfolios fell last year to 43%, from 48%, and allocations to stocks rose to 33%, from 29%. Average equity allocations in North America were at 42% at the end of the year.
The spotlight for the survey this year was the enterprise value of wealth management firms. The survey found that the trust and confidence levels of HNW individuals in both financial advisers and their firms rose substantially. Not surprisingly, it also concluded that larger wealth management firms with a broader range of capabilities have a more favorable competitive position in the market.
“We’re not saying that smaller, niche firms can’t be successful, but the bigger firms are better positioned to serve these clients,” Mr. Sullivan said. “They also have a bigger challenge to make it work.”
It’s critical that the advisers buy into the idea, said Mr. Thiel, whose unit is a part of Bank of America Corp. “The way you do it is, to keep the focus on clients. We’re introducing advisers to all the capabilities and people who can provide services across the bank. We want them to feel comfortable putting these people in front of their clients.”
He’ll have his work cut out for him.
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