This year’s World Wealth Report from Capgemini finds that HNWIs’ wealth surpassed the USD70 trillion threshold, and 1.6 million new HNWIs were added globally.
Wealth for HNWIs grew 10.6 per cent year on year, a sixth consecutive year of gains. But for all their increasing wealth and high returns, HNWIs are seemingly dissatisfied with their wealth managers, the report found.
Wealth gains are global. Asia-Pacific and North America powered HNWI population and wealth growth, accounting for 74.9 per cent of the increase in global HNWI population (1.2 million new HNWIs) and 68.8 per cent of the rise in HNWI wealth (USD4.6 trillion in new HNWI wealth). Europe’s strong performance continued in 2017 with 7.3 per cent HNWI global population growth and 7.8 per cent HNWI wealth growth.
Increased returns were led by investments in equities, cash, and real estate. Equities were the most significant asset class in Q1 2018, at 30.9 per cent of HNWI financial wealth; cash and cash equivalents stayed in second place at 27.2 per cent; and real estate increased to 16.8 per cent to become the third largest asset class.
Despite increased returns, HNWIs are still unsatisfied. Only 55.5 per cent of HNWIs globally said they connected strongly with their wealth manager despite investment returns up 27.4 per cent in 2017.
Wealth management firms are reluctant to provide advice on cryptocurrencies, despite strong interest among millennial HNWIs. 29 per cent of HNWIs have interest in holding cryptocurrencies, with 71.1 per cent of younger HNWIs placing an importance on receiving cryptocurrency information from their wealth managers. Yet only 34.6 per cent of HNWIs globally reported that they have received cryptocurrency information from their wealth managers.
Wealth management firms prepare for BigTech entry. Although widespread global entry of BigTechs into wealth management remains uncertain, leading firms (nearly 75 per cent of all interviewed firms) are investing in innovative technologies, such as intelligent automation and AI, over the next 24 months as they prepare for BigTechs to play a larger role in the industry.