These are among the findings of a wide-ranging new report by the Boston Consulting Group, its 13th on the global wealth management industry in as many years.
The 28-page report, which may be downloaded from the group’s website by clicking here (and signing in), analyses how the mature economies of the “old world” and the developing economies of the “new world” are moving at different speeds, forcing wealth managers in different regions to grapple with complicated sets of problems.
For example, because the bulk of the increase in wealth in the new world will be driven primarily by wealth creation, the emphasis for wealth managers in these regions going forward will be on capturing a slice of this new – unlike back in the “old world”, where wealth managers will have little choice but to play a “share stealing game” for existing wealth.
Overall, the Asia-Pacific region, excluding Japan – “and especially its new wealth” – will account for the bulk of the increase in global wealth through 2017, the report notes (see chart, below).
|
Regional contribution to growth |
||
|
New World (70%) |
Old World (30%) |
|
|
Asia-Pacific ex-Japan |
|
$20 |
|
Latin America |
|
$ 1.9 |
|
Middle East and Africa |
|
$ 1.7 |
|
Eastern Europe |
|
$ 1.7 |
|
|
Western Europe |
$ 4.8 |
|
|
North America |
$ 4.7 |
|
|
Japan |
$ 1 |
|
TOTAL: |
|
$35.7trn |
Source: BCG Global Wealth Market –sizing Database, 2013
Note: Global private financial wealth is based on complete (not rounded) numbers. Private financial-wealth numbers for all years were converted to US dollars at year-end 2012 rates to exclude the effect of currency fluctuations.
Other key findings contained in "Global Wealth 2013: Maintaining Momentum in a Complex World":
- The total number of millionaire households reached 13.8 million globally in 2012, or 0.9% of all households; the US had the largest number, with 5.9 million, followed by Japan (1.5 million), and China (1.3 million); the highest density was in Qatar
- The world’s wealthiest are forecast to continue to get wealthier, with those in the UHNW category expected to see the strongest growth over the next five years; "all segments [of wealth] in the old world will grow at lower rates than those in the new world"
- The "offshore model" of wealth management remains a viable one, "because wealth management clients — particularly those in the high net worth segment (with at least $1m in wealth) and the ultra high net worth segment (with more than $100m) will continue to seek diversification, along with broad private banking capabilities, specialised expertise, high-quality service, discretion, and domiciles with relatively high levels of economic and political stability"
- "Offshore centers must position themselves not only as possessing skills and expertise that cannot easily be found onshore, but also as embracing full transparency and integrity"
- "Some wealth that had previously been repatriated, notably by investors based in Western European countries, has partly flowed back offshore, owing to the highly-differentiated value propositions that offshore domiciles can provide"
- Switzerland was the top destination for offshore wealth in 2012, with around $2.2trn of the total offshore pie of $8.5trn; it was followed by Hong Kong and Singapore, with $1.2trn, the Channel Islands and Dublin with $1.1trn, and the Caribbean and Panama with $1.1trn
