In a clear sign of the significant shift
in the world’s wealth base and power, China’s high net worth
population surpassed that of the UK’s in 2008 – some 364,000 high
net worth individuals in all – to become the fourth largest in the
world, after exceeding France in 2007.
According to the 2009 World Wealth
Report, just published by Merrill Lynch Global Wealth
Management and consultant Capgemini: “In 2008, despite steep market
capitalisation losses, the closed nature of China’s markets
combined with robust macroeconomic growth to help China avoid some
of the steep losses felt elsewhere.”
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The report added that Brazil surpassed
Australia and Spain to reach 10th place among high net worth
populations globally (at 131,000 individuals).
The total number of high net worth individuals
(HNWs) around the world was down 14.9 percent from 2007, while the
value of their wealth dropped 19.5 percent. The “unprecedented
declines” wiped out two years of growth in 2006 and 2007, said the
report, reducing both the HNW population and its wealth to below
levels seen at the close of 2005.
It adds that while the global HNW population
is still concentrated, “the ranks are shifting”. The US, Japan and
Germany together accounted for 54 percent of the world’s HNW
population in 2008, up slightly from 53.3 percent in 2007.
The most significant declines in the HNW
population in 2008 occurred in the three largest regions: North
America (-19.0 percent), Europe (-14.4 percent) and Asia-Pacific
(-14.2 percent). In Europe, the segment’s population falls varied
by country: down 26.3 percent in the UK, 12.6 percent in France and
only 2.7 percent in Germany.
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By GlobalDataUnsurprisingly, the report from Merrill Lynch
and Capgemini found more than 25 percent of HNWs withdrew assets or
left their wealth management firm altogether in 2008,
demonstrating, said the report’s authors a “heightened need for
wealth management firms to reassure clients, and focus on increased
transparency and simplicity to mitigate any gaps in understanding
between clients, advisors and firms”.
$2.19tr lost by the top
10
The findings correlate with data
published in March by Private Banker International, a
sister publication to RBI, which said that the world’s 10 largest
wealth managers lost $2.19 trillion in assets under management
(AuM) in 2008, a 24.6 percent decline in total AuM.
Private Banker International research
from the companies’ most recent regulatory filings showed the
shocking extent of the damage from declining investment markets,
particularly in the second half of last year.
It also showed a significant reshuffle in the
wealth management hierarchy, driven by mergers and acquisitions,
client preferences and, in some cases, fluctuations in exchange
rates.
The 2009 World Wealth Report
concludes that HNW wealth is forecast to start growing again as the
global economy recovers – but only by 2013. By 2013, it is
forecasting global HNW financial wealth to recover from $32.8
trillion to $48.5 trillion, after advancing at an annual rate of
8.1 percent.
By 2013, it also expects Asia-Pacific to
overtake North America as the largest region for HNW financial
wealth.
