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January 30, 2017updated 04 Apr 2017 1:19pm

Why advisers should keep an eye on Latin America’s ultra-wealthy market

Despite socio-political turmoil in recent years, Latin America is due to see a boost in its ultra-wealthy population, with Argentina leading the race, by 2020, writes Silvana Amparbeng, wealth management analyst at Verdict Financial.

By Silvana Amparbeng

Despite socio-political turmoil in recent years, Latin America is due to see a boost in its ultra-wealthy population, with Argentina leading the race, by 2020.

According to Verdict Financial’s data, ultra high net worth individuals (UHNWI) are forecast to experience considerable growth by 2020. Latin America will be leading the race, showing compound annual growth rate (CAGR) of 13% for individuals and nearly 14% growth in their assets. 

The best performer is Argentina, with 10m+ wealth band increasing by 30%.

Wealth of opportunities – but not in Ukraine:

Emerging markets in Latin America hold plenty of opportunities for advisers to grow assets under management and capitalise on the growing wealthy population.

However, UHNWIs in Western Europe are forecast to experience an increase of only 7% by 2020.

Ukraine is expected to be the worst performer, showing near zero percent growth.

As the population ages the growth is likely to be derived by the fact that more wealth is accumulated over time and more individuals cross the 10m wealth threshold than ever before. This will be counterbalanced by low growth rates for the non-affluent market. For instance, non-affluent individuals in the US are forecast to register a negative CAGR of 9.4%.

Leading up to 2020, in most countries worldwide, UHNWIs are forecast to grow faster than other wealth bands.

In particular, in emerging markets across Latin America, both the local and overseas propositions should be targeted at the emerging wealthy populations, and advisors should be prepared to manage their clients’ expectations competently in order to grow their share of the wallet.

How much will UHNW individuals and their liquid assets grow over 2016-2020?

Source: Verdict Financial’s Global Wealth Markets Analytics

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