Asia Pacific HNWI population overtakes North America, says World Wealth Report

Asia Pacific has overtaken North America for the first time as the region with the highest number of high net worth individuals (HNWI), according to the latest World Wealth Report, jointly published by RBC Wealth Management and Capgemini.

The population of HNWIs in Asia Pacific grew 1.6% to 3.37 million in 2011, surpassing North America’s 3.35 million. But North America still has the most HNWI wealth at $11.4trn, compared to Asia Pacific’s $10.7trn.

Compared to the robust growth of 8.3% seen in 2010, the global HNWI population last year grew only by 0.8%. Most of this growth came from the $1-5m wealth band, which comprises 90% of the population. Among UHNWIs, the population declined 2.5% in 2011, while its wealth declined by almost 5%.

In Europe, Germany is the country with the highest number of HNWIs (951,000), followed by the UK (441,000), France (404,000), Switzerland (252,000) and Italy (168,000). For comparison, the US leads with just over 3 million, followed in second place by Japan (1.8 million).

But as the number of HNWIs increased slightly, their aggregate investable wealth decreased overall as market volatility took its toll, said George Lewis, group head, RBC Wealth Management. “It is significant that for the first time this year there are now more high net worth individuals in Asia Pacific than in any other region. However, losses in key markets such as Hong Kong and India meant that wealth contracted in Asia Pacific overall.”

Other highlights of the report include:

– The overall financial wealth of HNWI declined across all regions in 2011, except in the Middle East.

– The 1.7% decline is the first since the 2008 world economic crisis, a year in which HNWI global wealth declined by 19.5%.

– In the UK, the number of HNWI in 2011 declined by 2.9%.

– 2011 was the second most volatile period in the past 15 years. Economic uncertainty and volatile markets in 2011 drove investors to safe-haven assets in 2011.

Wealth management AUM has increased since 2008, but the cost of operations has risen at a pace higher than income growth, with scalability of business models being the new frontier.

For the purposes of the report, a HNWI is someone with $1m in liquid, investable assets. An Ultra high net worth individual (UHNWI) has $30m or more.

A full copy of the report can be accessed here: www.capgemini.com/worldwealthreport

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