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World’s richest became even richer last year
Monitoring Report
EVEN as world financial markets broke down last year, personal
wealth around the world grew 5 per cent to $109.5 trillion,
according to a global wealth report released on Thursday by Boston
Consulting Group. It was the sixth consecutive year of expanding
wealth. The fastest growth was among households in developing
regions, such as China and the Gulf states and among families who
were already rich. That wealth also is increasingly concentrated
among the richest.
The top 1 per cent of all households owned 35 per cent of the
world’s wealth last year. Meanwhile, the top 0.001 per cent,
ultra-rich households holding at least $5 million in assets,
commanded $21 trillion - a fifth of the world’s wealth. The planet
also continues to mint new millionaires rapidly. The biggest jumps
in 2007 came from emerging countries in Asia and Latin America.
Overall, the number of millionaire households grew 11 per cent to
10.7 million last year. BCG notes that, while the rich are still
rich, they have been making some adjustments as a result of the
financial crisis.
This year, assets are being shifted to more conservative
investments, more money is being kept onshore in home markets and
some individuals have curtailed new investment. Yet BCG cautioned
the outlook for wealth markets and the banks who serve them, is
dimmed by the current financial crisis. North American personal
wealth growth slowed to 3.8 per cent last year, compared with 9 per
cent in 2006, reflecting the the mortgage crisis and the onset of
the credit crunch last summer.
“The financial crisis continue to cast a pall over established
wealth markets,” said Victor Aerni, a Zurich based partner who
coauthored the report. BCG, which advises banks and wealth managers,
forecasts personal wealth will continue growing, but at a slower
pace.
This year, with Wall Street suffering through one of its worst
slumps in decades, growth in assets is expected to rise less than 1
per cent. Things will improve over the next five years, BCG said,
with personal wealth growing more than 3 per cent annually - well
off the 8.5 per cent set between 2002 and 2007.
Wealth is growing at much faster rates among the rest of the world.
Households in Asia, the Pacific Rim excluding Japan and Latin
America saw the greatest growth, with wealth rising 14 per cent.
That growth was fuelled by manufacturing in Asia and commodities in
Latin America and the Middle East, as well as more currency and
political stability. BCG observed that banks, brokerages and money
managers will have little choice, but to expand their presence in
these fast growing centres. Dubai and Singapore, the firm said, are
becoming regional private banking centres offering greater
competition to traditional havens such as Switzerland.
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