Emerging Markets Lead Growth in Wealthy Individuals
Capgemini and Merrill Lynch have released their twelfth annual World Wealth Report. This year’s report contains some interesting findings about the wealth management industry in 2007 and the financial behavior of High Net Worth Individuals (HNWI) during that time.
Some of the study’s key findings:
10.1 million individuals worldwide held at least $1 million in financial assets, an increase of 6.0% over 2006
- Global HNWI wealth totaled $40.7 trillion, a 9.4% gain from 2006, with average HNWI wealth surpassing $4 million for the first time
- The Ultra-HNWI “wealth band” experienced the strongest growth, gaining 8.8% in population size and 14.5% in accumulated wealth
- Emerging markets, especially those in the Middle East and Latin America, scored the greatest regional HNWI population gains
- India, China and Brazil had the highest HNWI population growth at the country level
- HNWI financial wealth is projected to reach US$59.1 trillion by 2012, advancing at an annual growth rate of 7.7%”
The first half of the year saw high levels of growth across the board, but was “followed by sharply diverging paths between mature and emerging economies in the second half,” as economic fundamentals changed in most first world nations.
The HNWI population grew by impressive margins in some of the world’s fastest growing economies.
One major inhibitor of the growth of the HNWI population was the Nikkei index, which contracted 11.1% during the year.
A “record wave” of IPOs, however, drew considerable numbers of mature market investors into the emerging markets.
The report concludes with a characterization of higher inflation in emerging markets and slow growth in mature markets as the two most important threats to continued growth of the HNWI population.
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