Product Code: FS0073IA
Global wealth market is on a continuous growth path. Worldwide liquid onshore assets will exceed $100tn by the end of 2017. However, the market is not homogenous: rates and reasons for growth differ between affluent segments, the level of economic development in any given nation, and local conditions. This means that understanding not just the actual size of a market, but also all of the above factors is crucial for wealth managers expanding to new countries and developing client targeting strategies.
At the end of 2016, worldwide liquid assets held onshore by affluent individuals (those with assets exceeding $50,000) totaled $92.4tn. 2017 will see 5.4% growth, adding another $5.3tn to the global affluent wealth market. Although combined, the mass affluent and HNW segments represent only 7% of the global population, their assets currently account for almost 95% of global liquid wealth. Most assets are in the hands of mass affluent individuals, which is the largest market in terms of liquid assets.
Critical success factors
- Understand the needs of different affluent segments - Competitors, even if focused on HNW clients, must not ignore the fact that the majority of the population remains mass affluent. This customer segment is likely to become HNW in the future - either by growing their wealth, or through inheritance. Hence, building engagement with this segment is essential.
- Understand the regional context - Regional markets differ significantly from one another. Local asset distribution, investment preferences, and economic situations should be analyzed in depth before opening new offices and advising clients on their offshore wealth.
- Choose investment products carefully - Advisors need to be aware of the characteristics of each single market as well as the international regulatory environment, in order to market the best products to their clients.
"The Global Wealth Market in 2017" report analyzes the global wealth and retail savings and investments markets, with a focus on the HNW segment. The report is based on our proprietary datasets.
Specifically, this report provides the following -
- Sizes the affluent market (both by number of individuals and the value of their liquid assets) using our proprietary datasets.
- Analyzes which asset classes are favored by global investors and how their preferences impact the growth of the total savings and investments market.
- Examines HNW clients' attitudes towards non-liquid investments, such as property and commodities.
- Identifies key drivers and booking centers for offshore investments.
- The wealthiest individuals grow their assets faster than the rest of the population, with the $10m+ segment forecast to experience the highest growth rate in the coming years.
- Despite increasing capital market volatility, investors' appetite for equities will continue to grow faster than other asset classes.
- Inequality in wealth distribution is clearly seen in emerging markets in particular, where nearly 96% of liquid assets are held by just over 3% of the population.
- The US is and will remain by far the biggest wealth market in the world. Asia Pacific economies will lead the growth of liquid asset pots in developing markets.
- The Swiss remain the wealthiest in terms of value of savings per individual, but as growth is slowing down in Western Europe in general by 2021, the US will lead the way.
Reasons to buy
- Benchmark your share of the global wealth market against the current market size.
- Forecast your future growth prospects using our projections for the market to 2021.
- Identify your most promising client segment by analyzing the penetration of affluent individuals globally.
- Review your offshore strategy by identifying HNW motivations for offshore investments and their preferred booking centers.
Table of Contents
Table of Contents
1 EXECUTIVE SUMMARY 2
- 1.1. Different local factors drive the growth of the global wealth market 2
- 1.2. Key findings 2
- 1.3. Critical success factors 2
- 2. SIZING AND FORECASTING THE GLOBAL WEALTH MARKET 8
- 2.1. The global wealth market is on a continuous growth path 8
- 2.1.1. Globally, the affluent market is worth more than $92tn 8
- 2.1.2. HNW individuals will hold more than $51tn in liquid assets by the end of 2021 9
- 2.1.3. The global affluent population totals 310 million individuals and continues to grow 10
- 2.1.4. The wealthiest will grow their assets at an even faster rate 12
- 2.2. Global retail savings and investment trends 13
- 2.2.1. Steady growth for equities and mutual fund holdings, but on a slowing trend 13
- 2.2.2. Bond holdings have been decreasing 14
- 2.2.3. For HNW individuals, less liquid asset classes play an important role 14
- 2.3. Retail savings and investments geographical analysis 16
- 2.3.1. Attitudes towards deposits differ clearly between mature and emerging markets 17
- 2.3.2. US investors hold over three times more equities and mutual funds than the developing markets average 20
- 2.3.3. Bond holdings are significantly affected by yields 21
- 2.4. Offshore holdings represent a significant proportion of global wealth 23
- 2.4.2. Motivations for offshoring wealth differ by country 25
- 3. REGIONAL WEALTH MARKETS GROWTH ANALYSIS 27
- 3.1. Global wealth is distributed unequally 27
- 3.1.1. HNW individuals hold a third of global wealth 27
- 3.1.2. The mass affluent segment is more important in developed markets 28
- 3.1.3. Inequality in wealth distribution is higher in frontier markets 29
- 3.2. The gap between mature and developing markets will shrink 29
- 3.2.1. Cambodia will be the fastest-growing wealth market over 2017-21 29
- 3.2.2. Latin America will be the fastest-growing region 31
- 3.2.3. Developing markets' impressive growth is offset by inflation 33
- 3.2.4. Exchange rate fluctuations affect the relative strength of wealth markets 37
- 4. THE GLOBAL WEALTH MARKETS RANKINGS 39
- 4.1. The US will remain by far the biggest wealth market in aggregate terms 39
- 4.1.1. China ranks second, although developed markets still dominate the top 15 39
- 4.1.2. HNW segment rankings highlight the growth of Asia Pacific 41
- 4.2. Liquid assets per capita analysis 44
- 4.2.1. By 2021 the average Hong Kong citizen will be wealthier than their Swiss counterparts 44
- 4.2.2. Large emerging markets' rankings highlight unequal wealth distribution 45
- 5. APPENDIX 48
- 5.1. Abbreviations and acronyms 48
- 5.2. Supplementary data 49
- 5.3. Coverage 52
- 5.3.1. Country classification 54
- 5.4. Definitions 55
- 5.4.1. AAGR 55
- 5.4.2. Affluent 55
- 5.4.1. Averages 55
- 5.4.2. CAGR 55
- 5.4.3. Developed (mature) economies or markets 55
- 5.4.4. Developing economies or markets 55
- 5.4.5. Emerging affluent 56
- 5.4.6. Emerging economies or markets 56
- 5.4.7. Frontier economies or markets 56
- 5.4.8. HNW 56
- 5.4.9. Individual 56
- 5.4.10. Liquid assets 56
- 5.4.11. Mass affluent 57
- 5.4.12. Mass market 57
- 5.4.13. Non-affluent market 57
- 5.4.14. Onshore 57
- 5.5. Methodology 57
- 5.5.1. 2017 Global Wealth Managers Survey 58
- 5.5.2. 2016 Global Wealth Managers Survey 58
- 5.5.3. Global Wealth Model methodology 58
- 5.5.4. Retail Investments Database Methodology 59
- 5.5.5. Exchange rates 60
- 5.6. Bibliography 63
- 5.7. Further reading 64
List of Tables
List of Tables
- Table 1: Global total liquid assets ($bn), end of year 2014-21f 10
- Table 2: Global number of affluent individuals (thousands), end of year 2014-21f 11
- Table 3: Global total retail savings and investments, end of year 2014-21f 14
- Table 4: Top 10 countries in terms of deposit allocations (%) as of 2016, with results for 2011 and projections for 2021 18
- Table 5: Top 10 developed countries in terms of deposit allocations (%) as of 2016, with results for 2011 and projections for 2021 19
- Table 6: Top 10 countries in terms of equities and mutual funds allocations (aggregate %) as of 2016, with results for 2011 and projections for 2021 21
- Table 7: Top 10 countries in terms of bonds allocations (%) as of 2016, with results for 2011 and projections for 2021 23
- Table 8: Retail non-resident savings and investments in selected markets ($bn), 2016 24
- Table 9: Top 10 (and selected) global wealth markets in terms of forecast CAGR, 2017-21 30
- Table 10: Top five (and selected) global wealth markets in terms of forecast real CAGR, 2017-21 34
- Table 11: Countries with the highest and lowest CPI rate over 2012-16 36
- Table 12: Top 15 wealth markets in terms of liquid assets ($bn) 2011, 2016, and 2021f 40
- Table 13: Top 15 wealth markets in terms of HNW liquid assets ($bn) 2011, 2016, and 2021f 42
- Table 14: Top 5 developing markets by liquid assets per capita, 2016 46
- Table 15: Top 5 developing markets by aggregate liquid assets, 2016 46
- Table 16: Global total liquid assets ($bn), end of year 2007-13 49
- Table 17: Global number of affluent individuals (thousands), end of year 2007-13 50
- Table 18: Global total retail savings and investments, end of year 2007-13 51
- Table 19: Our geographic coverage spans 71 markets and six regions 53
- Table 20: Country classification in terms of level of market development 54
- Table 21: US dollar exchange rates 61
List of Figures
List of Figures
- Figure 1: HNW global onshore liquid assets have been growing steadily 9
- Figure 2: The $10m+ segment is set to experience the highest growth over the next few years 12
- Figure 3: Deposits make up for almost 50% of global investors' holdings 13
- Figure 4: HNW investors hold over 15% of their portfolios in alternative asset classes 15
- Figure 5: North Americans' risk aversion will drive non-liquid investments 16
- Figure 6: Central and Eastern European markets rely the most on deposit allocations 17
- Figure 7: Mature market average deposit holdings are below the global midpoint 19
- Figure 8: Developing markets still have relatively low allocations in equities and funds 20
- Figure 9: Bond allocations differ only slightly across different regions 22
- Figure 10: UAE residents offshore over half of their wealth 25
- Figure 11: Geographic diversification is the most important driver of offshore investments 26
- Figure 12: The wealthiest 8% of the global population hold almost 92% of the world's liquid assets 28
- Figure 13: Mass affluent individuals represent over 30% of the population in developed markets 28
- Figure 14: In frontier markets, most wealth is in the hands of the few 29
- Figure 15: Developing markets will continue to grow faster than mature economies 31
- Figure 16: Japan's forecast growth is well behind the global average 32
- Figure 17: Western Europe will struggle the most with growth in the foreseeable future 33
- Figure 18: In real terms, frontier markets' growth over 2017-21 will still largely exceed that of mature economies 35
- Figure 19: In real terms, Asia Pacific's wealth market has been growing much faster than other regions 37
- Figure 20: Exchange rate volatility provides a different picture of the UK wealth market 38
- Figure 21: Kazakhstan is one of the fastest-growing wealth markets 41
- Figure 22: Argentina has been improving its HNW liquid assets ranking 43
- Figure 23: Top 10 markets in terms of onshore liquid asset holdings per individual ($), 2016 45
- Figure 24: India will improve its rank position in terms of liquid assets per capita 47
- Figure 25: Our geographic coverage spans 71 markets and six regions 52