Friday 19 December 2014

16.3m households worldwide are classed as millionaires

Giles Broom and Margaret Collins

Published 11/06/2014 | 02:30

Global Wealth Growth
Global Wealth Growth

Rich Chinese helped make Asia the fastest-growing region for affluent families as the increase in global wealth accelerated last year, according to a study by Boston Consulting Group.

Private wealth in the Asia-Pacific region excluding Japan jumped 31pc to $37 trillion (€27 trillion) in 2013, supporting a 15pc advance to $152trn globally. That outpaced the 8.7pc worldwide growth in 2012 and provided a boost to companies that oversee funds for the rich, the Boston-based firm said in its 14th annual report on the subject.

"Wealth managers globally had another outstanding year of growth in 2013," BCG said. "The Asia-Pacific region accounted for the strongest growth."

China leapfrogged Germany and Japan in the past five years to trail only the US in a ranking of countries by private financial wealth. China's $22trn is expected to increase more than 80pc to $40trn by 2018, while the US may grow to $54trn from $46trn over the same period, BCG said.

The number of millionaire households in the world jumped to 16.3m in 2013 from 13.7m in 2012, according to the report.

Alongside China's soaring growth, faster-growing countries include India, which may more than double private wealth assets to $5trn by 2018, and Russia, where wealth may advance more than 80pc to $4trn.

The pace of growth in Latin American wealth was little changed compared with a year earlier after an increase of 11pc to $3.9trn. It's expected to climb 8.8pc a year until 2018, compared with an 11pc annual increase in the Asia-Pacific region.

Lag

Over the next five years, North America, western Europe and Japan are all expected to lag behind the world's average annual growth in wealth of 5.4pc.

BCG expects rich households to have almost $200trn worldwide by 2018, with the Asia-Pacific region contributing about half of global growth. Assets from Asian millionaires will help Hong Kong and Singapore encroach on Switzerland as the world's number one offshore private-banking centre.

Most offshore assets were deposited by rich families from western Europe, where the wealthy historically chose Switzerland to book money outside their country of residence.

These clients contributed to an outflow of 4pc of managed assets in Switzerland and Luxembourg during 2013 as the US and western European governments cracked down on tax dodgers with offshore accounts.

Switzerland "remains under heavy pressure because of its significant exposure to assets originating in developed economies, some of which are expected to be repatriated following government actions to minimise tax evasion", the report said. Affluent individuals from the Middle East, Africa and Eastern Europe also tend to prefer Switzerland to other offshore locations such as the Caribbean, the UK and the US.

Irish Independent

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