Royal Bank of Canada and Cap Gemini released their annual report on high net worth individuals Wednesday. The latest survey confirms much of what many suspect: The rich continue to get richer. The wealthy in Asia are catching up to western levels of wealth.
Some of the basic numbers: An improved economy, strong equity market performance helped add 1.76 million people to the global HNWI population last year. Investable wealth of HNWIs grew by almost 14 per cent, hitting US$52.62 trillion. North America and Asia-Pacific vie for the world's largest HNWI market by population; growth in Asia-Pacific narrowed North America's lead to less than 10,000 individuals. North America's HNWI population expanded by 16 per cent to 4.33 million, Asia-Pacific's grew by 17 per cent to 4.32 million. North America remains the wealthiest region, increasing its HNWI wealth by 17 per cent to US$14.88 trillion. In Canada, the total number of HNWIs increased by 7.2 per cent to reach 320 thousand; wealth of this group grew by 9.1 per cent to reach US$979 billion.
"Overall, 2013 was another strong year for the high net worth market, with surging equity markets and improving economies contributing to double digit growth in both population and wealth levels," George Lewis, group head, RBC Wealth Management & RBC Insurance was quoted as saying. "Looking at longer term growth trends, nearly 40 per cent of the current level of high net worth wealth has been created in the past five years alone.”
HNWIs allocated more of their wealth, over one-third of their assets outside of their home region. This is up from one-quarter the year previous. Cash levels remained high at 27 per cent. Allocations to alternative investments increased by three percentage points to 13 per cent of portfolios. HNWIs also reduced their focus on wealth preservation and began to orient portfolios toward growth.
The vast majority of HNWIs, 92 percent, feel that investing time money and expertise toward positive social impact is important; 61 per cent described this as very or extremely important. HNWIs in emerging markets under 40 are leading the trend—75% of the 30-something HNWI's feel social impact is “important, or very important.”