To better understand the high net worth individual (HNWI), Capgemini and RBC Wealth Management just released their new World Wealth Report for 2015. The report surveys over 5,000 HNWIs in 23 major markets to offer up a clearer understanding of the amount of wealth held by the world’s one percent.
In 2014, 920,000 new millionaires were created, bringing the total number to 14.6 million globally. Their wealth also increased to $56.4 trillion with the majority of those increasing numbers falling to just a handful of countries including the US, Japan, Germany and China. These four countries made up for 67 percent of the growth in 2014, adding 610,000 HNWIs to the population.
Although the HNWI population and wealth grew over 2014, it did so at a slower rate than the year prior. The HNWI population grew by a total of 6.7 percent globally, while wealth grew slightly more, by 7.2 percent globally. Ultra-HNWIs make up only one percent of the total number of HNWIs but account for 35 percent of the group’s total wealth.
The North America and Asia-Pacific regions have continuously produced the most HNWIs with the largest amount of wealth. This year North America holds the greatest amount of wealth with $16.2 trillion versus Asia-Pacific’s $15.8 trillion, but Asia-Pacific surpasses North America with a population of 4.69 million HNWIs to 4.68 million.
Cash has been the largest asset since 2004, but this year equity moved to the top position with 26.8 percent of wealth invested instead of held in cash, which now takes the second slot at 25.6 percent. Other investments including fixed income, real estate and alternative investments total at 35.8 percent.
HNWIs are turning to family, wealth managers and friends (in that order) for guidance in areas of social impact. 63.5 percent of HNWIs under 40 years of age are turning to wealth managers for advice, and of that percentage 57.8 of them are women. Unfortunately while younger HNWIs are the ones seeking out the support of a wealth manager, only 61 percent say that managers understand their needs.