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Improving economic and equity market performance helped add 1.76 million people to the global HNWI population in 2013, while the investable wealth of HNWIs grew by nearly 14% to reach a record high of US $52.62 trillion. Photo: Pradeep Gaur/Mint
Improving economic and equity market performance helped add 1.76 million people to the global HNWI population in 2013, while the investable wealth of HNWIs grew by nearly 14% to reach a record high of US $52.62 trillion. Photo: Pradeep Gaur/Mint

Asia-Pacific set to outpace North America in wealth creation: report

While North America's HNWI population expanded by 16% in 2013 to 4.33 million, the Asia-Pacific's grew by 17% to reach 4.32 million

Mumbai: The Asia-Pacific has narrowed North America’s lead in the population of high networth individuals (HNIs) and is set to overtake it this year, according to the World Wealth Report 2014 published by global technology consulting and outsourcing firm Capgemini SA and RBC Wealth Management.

While North America’s HNI population expanded by 16% in 2013 to 4.33 million, the Asia-Pacific’s grew by 17% to reach 4.32 million.

HNIs are defined as those having investable assets of $1 million (around 6 crore) or more, excluding primary residence, collectibles, consumables, and consumer durables.

Improving economic and equity market performance helped add 1.76 million people to the global HNI population in 2013, while the investable wealth of HNIs grew by nearly 14% to reach a record high of $52.62 trillion.

Robust growth is expected in most regions, with Asia-Pacific at the forefront with an anticipated 9.8% annual growth rate, positioning the region to be the largest HNI market by population in 2014 and by wealth by 2015.

Confidence in financial markets and regulatory bodies also increased, up to 58% from 45%, and 56% from 40%, respectively. HNIs remain optimistic about their future prospects, with 77% feeling confident in their ability to generate wealth in the near future.

The World Wealth Report is the industry leading benchmark for tracking HNIs, their wealth, and the global and economic conditions that drive change in the wealth management industry. This year’s 18th annual edition includes findings based on responses from more than 4,500 HNIs across 23 countries.

The report says that nearly two million individuals have joined the HNI ranks, with the 15% increase in HNI population in 2013 the second largest since 2000, surpassed only by immediate post-crisis catch-up growth of 17% in 2009.

North America maintained its position as the wealthiest region, increasing its HNI wealth by 17% to reach $14.88 trillion. This growth was outpaced by the Asia-Pacific, where HNI wealth expanded by 18% to reach $14.2 trillion.

Europe’s HNI population grew by 12% to reach 3.83 million and its wealth by 14% to reach $12.39 trillion, both significant increases from the previous two years.

Latin America was an exception to strong global HNI growth, with increases of only 4% in population and 2% in wealth, due to slow economic growth and challenged equity markets.

“Overall, 2013 was another strong year for the high networth market, with surging equity markets and improving economies contributing to double-digit growth in both population and wealth levels," said M. George Lewis, group head of RBC Wealth Management and RBC Insurance. “Looking at longer-term growth trends, nearly 40% of the current level of high networth wealth has been created in the past five years alone."

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