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Record rise in global high net worth individuals

Industry confidence increases while wealth managers' performance ratings drop

24 July 2014

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The global number of high net worth individuals (HNWI) rose by 1.76 million in 2013, helped largely by buoyant economic and equity market performance, RBC's World Wealth Report 2014 has revealed.

The investible wealth of HNWI rose by nearly 14 per cent to reach a record high of US$ 52.62tn, representing the second highest rise since 2000, surpassed only by the 17 per cent jump in 2009.

M George Lewis, group head of RBC Wealth Management and RBC Insurance, said that nearly 40 per cent of the current level of high net worth wealth has been created in the past five years alone.

Lewis added: "Overall, 2013 was another strong year for the high net worth market, with surging equity markets and improving economies contributing to double digit growth in both population and wealth levels."

The US and Asia-Pacific remained the two wealthiest regions, as their HNWI wealth rose by 17 per cent to US$14.88tn and by 18 per cent to US$14.20tn.

The first two quarters of 2014 revealed that wealth consolidation had declined by 17 per cent in favour of investment and expansion, which rose from 18 per cent to 31 per cent.

The report also showed that confidence in the wealth management industry climbed from 61 per cent to approximately 75 per cent. According to the report, 77 per cent of HNWIs are feeling confident in their ability to generate wealth in the near future.

On the contrary, wealth managers' performance ratings dropped from 64 per cent in 2012 to 61 per cent in 2013. US wealth managers' ratings suffered the most, as their ratings dropped by 7 per cent.

Jean Lassignardie, chief sales and marketing officer at Capgemini Global Financial Services, said of the declining figures: "Even though we are seeing an encouraging environment of high growth and confidence, declining wealth manager performance scores indicate opportunities still exist for firms to tailor their offerings to better meet client needs.

"One way to address the evolving demands of current and future clients is to provide digital capabilities that move beyond simply having a digital presence, to offering an integrated and seamless client experience that incorporates digital at all touch points," he added.

The report forecasts that the groups will generate a further US$12tn by 2016, as Asia-Pacific is expected to have the wealthiest HNWI group in the world by 2015.

 

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