HNWIs
MMerrill Lynch and Cap Gemini released their 2005 World Wealth Report (pdf here) this week. Hopefully I’ll have more to say when I’ve read the full report; in the meantime, here are some highlights from the press release:
- “The number of high-net-worth individuals (HNWIs) — individuals with a net worth of at least U.S. $1 million, excluding their primary residence — grew by 7.3 percent to 8.3 million, a net increase of 600,000 worldwide. North America led with a nearly 10 percent growth rate to 2.7 million HNWIs, surpassing the 2.6 million in Europe. Asia-Pacific’s growth rate of over 8 percent — to 2.3 million HNWIs — was twice that of Europe.”
- As wealth continues to grow, the report notes that HNWIs with financial wealth between $5 million and $30 million are facing particular challenges in managing their increasing net worth. “Those HNWIs, whom we have termed the “Mid-Tier Millionaires” tend to respond to the paradox they are facing, added complexity and their desire to have customized solutions, by increasing the number of specialist providers to manage their wealth,” stated Petrina Dolby, vice president of Capgemini’s Global Wealth Management Practice. “This, as well as the increase in cost of maintaining their lifestyle over all, places additional pressures on performance expectations…”
- “HNWIs continued to benefit from tax reform, with protection from estate taxes steadily rising through the end of the decade, before “sunsetting” by the end of 2010.”
- “A combination of factors, including rising inflation and interest rates, is expected to slow global growth and affect the value of financial assets. As a result, global high net worth wealth is projected to grow at a compound annual rate of 6.5 percent over the next five years, reaching U.S. $42.2 trillion by 2009.”
-
HNWI Growth by Region, 2004
Region
HNWI Wealth
Number of HNWIs
North America
10.2%
9.7%
Asia-Pacific
8.5%
8.2%
Europe
3.7%
4.1%
Latin America
7.9%
6.3%
Middle East
28.9%
9.5%
A complete copy of the 2005 World Wealth Report is available online at www.capgemini.com/worldwealthreport.com or www.ml.com.
With HNWI growth projected at only 6.5% annually over the next five years, it’s surely time for more tax cuts. Or perhaps they could find some high quality financial advisors in Ohio.
AB