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World's richest got even richer last year: report
(Agencies)
Updated: 2008-09-05 07:29 NEW YORK -- The old saying holds true: The rich do get richer. Even as world financial markets broke down last year, personal wealth around the world grew 5 percent 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 percent of all households owned 35 percent of the world's wealth last year. Meanwhile, the top 0.001 percent, ultra-rich households holding at least $5 million in assets, commanded $21 trillion -- a fifth of the world's wealth. 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 percent last year, compared with 9 percent 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 percent. Things will improve over the next five years, BCG said, with personal wealth growing more than 3 percent annually -- well off the 8.5 percent 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 percent. That growth was fueled 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 centers. Dubai and Singapore, the firm said, are becoming regional private banking centers offering greater competition to traditional havens such as Switzerland. |
