ADVERTISEMENT

World's richest got even richer last year: report

Deals

Even as world financial markets broke down last year, personal wealth around the world grew 5% to $109.5 trillion, according to a global wealth report by Boston Consulting Group.

It was the sixth consecutive year of expanding wealth. The fastest growth was among households in developing regions, such as China and the Gulf States and among families who were already rich.

That wealth also is increasingly concentrated among the richest.

The top 1% of all households owned 35% of the world's wealth last year. Meanwhile, the top 0.001% ultra-rich households holding at least $5 million in assets, commanded $21 trillion - a fifth of the world's wealth.

The planet also continues to mint new millionaires rapidly. The biggest jumps in 2007 came from emerging countries in Asia and Latin America. Overall, the number of millionaire households grew 11% to 10.7 million last year.

BCG notes that, while the rich are still rich, they have been making some adjustments as a result of the financial crisis.

This year, assets are being shifted to more conservative investments, more money is being kept onshore in home markets and some individuals have curtailed new investment.

Yet BCG cautioned the outlook for wealth markets and the banks who serve them, is dimmed by the current financial crisis.

North American personal wealth growth slowed to 3.8% last year, compared with 9% in 2006, reflecting the mortgage crisis and the onset of the credit crunch last summer.

“The financial crises continue to cast a pall over established wealth markets,” said Victor Aerni, a Zurich based partner who coauthored the report.

BCG, which advises banks and wealth managers, forecasts personal wealth will continue growing, but at a slower pace. This year, with Wall Street suffering through one of its worst slumps in decades, growth in assets is expected to rise less than 1%.

Things will improve over the next five years, BCG said, with personal wealth growing more than 3% annually - well off the 8.5% set between 2002 and 2007.

Wealth is growing at much faster rates among the rest of the world. Households in Asia, the Pacific Rim excluding Japan and Latin America saw the greatest growth, with wealth rising 14%. That growth was fueled by manufacturing in Asia and commodities in Latin America and the Middle East, as well as more currency and political stability.

BCG observed that banks, brokerages and money managers will have little choice, but to expand their presence in these fast growing centers. Dubai and Singapore, the firm said, are becoming regional private banking centers offering greater competition to traditional havens such as Switzerland. (Reuters)

ADVERTISEMENT

Czech economic confidence weakens in October Analysis

Czech economic confidence weakens in October

Parl't votes to phase out savings coops integration framewor... Parliament

Parl't votes to phase out savings coops integration framewor...

Roche Szolgáltató appoints P&C business partner lead Appointments

Roche Szolgáltató appoints P&C business partner lead

Budapest airport shuttle bus service expanded City

Budapest airport shuttle bus service expanded

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.