Super-rich own half of world's personal wealth: Report

NEW YORK • The rich are getting a lot richer and doing so a lot faster.

Personal wealth around the globe reached US$201.9 trillion (S$272 trillion) last year, a 12 per cent gain from 2016 and the strongest annual pace in the past five years, Boston Consulting Group (BCG) said in a report released last Thursday.

Booming equity markets swelled fortunes, and investors outside the US got an exchange-rate bonus as most major currencies strengthened against the greenback.

The growing ranks of millionaires and billionaires now hold almost half of global personal wealth, up from slightly less than 45 per cent in 2012, according to the report.

In North America, which had US$86.1 trillion of total wealth, 42 per cent of investable capital is held by people with more than US$5 million in assets. Investable assets include equities, investment funds, cash and bonds.

"The fact that the wealth held by millionaires as a percentage of total wealth is increasing does not mean that the poor are getting poorer," Ms Anna Zakrzewski, the report's lead author, said in an e-mailed statement.

"What it means is that everyone is getting richer. Specifically, we believe that the rich are getting richer faster."

Last year's big winner was China, which now ranks second globally in terms of financial wealth after overtaking Japan in the past five years, Ms Zakrzewski said. While China trails only the United States in the number of millionaires and billionaires, the biggest driver of growth in the Asian country was its so-called "mass affluent" segment, or those with US$250,000 to US$1 million of investable assets.

"China will continue to experience similar growth as in the past and this will mean that over the next five years, there will be more wealth created in China than in the US," she said, adding the number of millionaires there is expected to grow four times as fast as in the US.

Eastern Europe and Central Asia had the greatest concentration of wealth at the top, with billionaires alone holding almost a quarter of investable assets.

Wealth is also highly concentrated in Hong Kong, where individuals with more than US$20 million hold 47 per cent of investable riches, the report said.

The Middle East was the region with the greatest share of wealth held in investable assets - US$3.1 trillion out of a total US$3.8 trillion.

Western European residents held 56 per cent in currency and deposits, while in North America the emphasis was on equities and investment funds, with 62 per cent of US$47 trillion of investable wealth parked in those assets.

BCG's annual study also showed Switzerland remained the world's biggest centre for managing offshore wealth with US$2.3 trillion, followed by Hong Kong with US$1.1 trillion and Singapore with US$0.9 trillion.

The two Asian centres have grown at yearly rates of 11 per cent and 10 per cent respectively over the past five years, more than three times the 3 per cent rate Switzerland has posted.

It is in the fast-growing markets that large wealth managers including Swiss banks UBS and Credit Suisse are casting wider nets. The Swiss banking secrecy from which they long profited has been weakened, meaning rich people from around the world can no longer easily use the alpine republic to stash wealth away from tax authorities at home.

BLOOMBERG, REUTERS

A version of this article appeared in the print edition of The Sunday Times on June 17, 2018, with the headline 'Super-rich own half of world's personal wealth: Report'. Print Edition | Subscribe