Asia-Pacific is expected to reclaim the top spot, with wealth anticipated to grow 9.8% to US$15.9tn by 2015. This forecast is based on a five-year trend in high net worth individuals’ population and wealth growth, stated the Asia-Pacific Wealth Report 2013.
Over the last five years (2007-2012), the population and wealth of Asia-Pacific’s high net worth individuals increased at “double and triple the rates of HNWIs in the rest of the world.”
In 2012, the HNWI population in Asia-Pacific expanded by 9.4% to 3.68m and their wealth rose 12.2% to US$12tn. North America edged out Asia-Pacific as the largest wealth market by HNWI population, growing by 11.5% to reach 3.73m.
“The Asia-Pacific market is clearly one to watch,” said George Lewis, group head, RBC Wealth Management & RBC Insurance.
“Its leadership in global high net worth wealth growth positions it to become the largest wealth market by population as early as 2014,” he added.
Asia-Pacific’s robust growth in 2012 builds on over five years of consistent outperformance. The region’s high net worth population and wealth has increased by 31% and 27% respectively since 2007, far outpacing growth in the rest of the world of 14% and 9%, the survey noted.
Strong economic growth couple with buoyant equity market and strong real estate market performance in some markets drove robust growth in Asia-Pacific’s HNWI population and wealth in 2012, according to Jean Lassignardie, chief sales and marketing officer, Capgemini Global Financial Services.
“This GDP growth rate is projected to drive Asia-Pacific’s growth in HNWI population and wealth through 2014,” Lassignardie said.
HNWI highly confident
Asia-Pacific’s HNWIs are highly confident in the wealth management industry and their ability to generate wealth in the near future, noted the survey.
The global survey sought views of over 4,400 HNWIs, including almost 1,400 respondents from Asia Pacific countries such as Australia, China, Hong Kong, India, Japan, and Singapore.
Almost 80% of HNWIs in Asia-Pacific (excluding Japan) highly trust their wealth managers and firms, compared to about two-thirds of HNWIs in the rest of world.
Additionally, 69.4% have high confidence in financial markets and 72.2% in regulators, compared to just 44.6% and 38.3% of HNWIs in other regions.
HNWIs in India and China have the highest trust, followed by Singapore, Hong Kong, and Australia, respectively.
Japan’s HNWIs proved an exception with less than a third having trust in key industry stakeholders.
In line with overall high trust levels, the outlook of Asia-Pacific (ex-Japan) HNWIs is extremely positive, with 90.5% confident they can build wealth in the near future, led by those in India (95.7%) and China (95.2%).
Distinct trends
Hong Kong and India experienced the most significant gains in HNWI population and wealth in 2012, following steep declines in 2011. Hong Kong’s HNWI population grew by 35.7% and their wealth by 37.2%, while India’s population rose by 22.2% and their wealth by 23.4%.
Japan and Taiwan were the only markets to experience single-digit rise in HNWI population, of 4.4% and 7.0%, respectively.
Asia-Pacific’s ultra-HNWI population and wealth growth of 15.4% and 17.8%, respectively was the highest among all wealth bands. It significantly exceeded gains made by ultra-HNWIs in the rest of the world, who expanded in population by 9.7% and wealth by 9.4%.
