Growth in private wealth slow: study

In its 16th annual study, “Global Wealth 2016: Navigating the New Client Landscape”, BCG outlines the evolution of private wealth from both a global and a regional perspective, addresses key industry trends and explores evolving client needs. 

It notes the needs particularly of underserved, non-traditional segments such as female investors and millennials, whose investment goals are not necessarily well addressed by the standard net-worth-based service approach.

“Segmentation approaches based mainly on wealth level and cost-to-serve models, both of which continue to be used by the majority of wealth managers, neglect what clients are truly willing to pay for,” Brent Beardsley, co-author of the report and the global leader of BCG’s asset and wealth management practice, said yesterday. 

“Such approaches no longer allow wealth managers to capitalise on the full potential of the market.”

Global private financial wealth grew by 5.2 per cent in 2015 to US$168 trillion (Bt5.9 quadrillion). The rise was less than a year earlier, when global wealth rose by more than 7 per cent. All regions except Japan experienced slower growth than in 2014.

Unlike in recent years, the bulk of global wealth growth in 2015 was driven by the creation of new wealth, such as rising household income, rather than by the performance of existing assets, as many equity and bond markets stayed flat or even fell Assuming that equity markets regain momentum, private wealth globally is expected to rise at a compound annual growth rate of 6 per cent over the next five years to $224 trillion in 2020. 

The number of millionaire households worldwide grew by 6 per cent last year, with several countries, particularly China and India, seeing large increases.

Private wealth booked in offshore centres grew by a modest 3 per cent in 2015 to almost $10 trillion. 

A key factor was the repatriation of offshore assets by investors in developed markets.