Global wealth grew by 7.5% in 2006 to reach $97.9 trillion, measured in local currencies. This increase marked the fifth consecutive year of expanding wealth, according to a new study by The Boston Consulting Group (BCG).
Despite the industry’s sustained growth and strong performance, wealth managers still have plenty of room to grow profitably. But as they pursue opportunities in rapidly developing regions such as Asia-Pacific, Latin America, and the Middle East, they face a host of challenges that require careful planning, the report cautions. “Tapping Human Assets to Sustain Growth: Global Wealth 2007” – Boston Consulting Group’s seventh annual global-wealth report - is based on a comprehensive market study of wealth in 62 countries (representing more than 96% of global GDP) and a benchmarking survey of 111 wealth managers who oversaw almost $10 trillion in client assets and liabilities. Among the findings:
Global Market Sizing. Wealth remained concentrated in certain regions. North America (the US and Canada) and Europe again had the deepest pools of wealth, at $36.2 trillion and $33.0 trillion, respectively. “Together, these countries accounted for 27% of all households and 71% of global wealth,” said Christian de Juniac, co-author of the report and a BCG senior partner. The next-largest wealth markets were Japan and the rest of Asia-Pacific, with $11.9 trillion and $10.6 trillion in assets under management (AuM), respectively. The smallest markets were Latin America, with $3.4 trillion in AuM, and the Middle East and Africa, with $2.9 trillion in AuM.
China and Brazil had the highest compound annual growth rates in AuM from 2001 to 2006, followed by four countries of Central and Eastern Europe: Hungary, Poland, Slovakia, and the Czech Republic. China’s wealth market is expected to outpace all others over the next five years, with a projected growth rate of 17.4% per year, well above the global rate of 5.6%. The number of millionaire households grew by 14.0% in 2006, to 9.6 million. “These were the richest 0.7% of households, and they owned $33.2 trillion - or about one-third - of global wealth,” said Bruce Holley, another of the report’s authors and a BCG partner.
“North America was home to nearly half of all millionaire households, Europe had about one-quarter, and Asia-Pacific accounted for about one-fifth.” The United States had, by far, the highest number of millionaire households, followed by Japan, the United Kingdom, and Germany. Remarkably, China ranked fifth, ahead of major European economies such as France and Italy. (more info) (marketwire.com)