Global wealth continued its recovery
internationally in 2010, growing by 8% or $9trn to $121.8trn, and
is forecast to grow at a compound annual growth rate (CAGR) of
almost 6% to reach $162trn by 2015.
US-based management consultancy Boston
Consulting Group (BCG) said the new global wealth figure was $20trn
above where it stood two years ago during the depths of the
financial crisis.
Go deeper with GlobalData
BCG’s 2011 global wealth report, Shaping a
New Tomorrow: How to Capitalize on the Momentum of Change,
noted that although there was a return to growth, disruptive
forces, including increased regulatory oversight and changes in
client behaviour, were rewriting the rules for wealth managers.
US remains in top spot, Japan
stalls
North America remained the world’s largest
wealth market, whose assets under management (AuM) totalled
$38.2trn with the gain of $3.6trn in AuM, representing a 10.2%
increase, the world’s second-highest growth rate.
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By GlobalDataWealth increased at a below-average rate of
4.8% in Europe, with a gain of $1.7trn in AuM.
Excluding Japan, Asia-Pacific became the
fastest growing wealth region with a growth rate of 17.1%.
While the Middle East and Africa saw a wealth
growth at the above global average rate of 8.6%. Also, Latin
American wealth grew by 8.2%. Combined together, these three
regions accounted for 24.4% of global wealth in 2010, up from 20.9%
in 2008
The biggest loser of them all is Japan, where
wealth declined by 0.2% to $16.8trn.
Revenue margins remain below
pre-crisis levels
BCG’s report flagged up continuing pricing
pressures for private banks and noted that there was tremendous
variation in pricing strategies between different wealth
managers.
BCG’s survey of 120 wealth-management
institutions worldwide found the average pre-tax profit margin
increased by 4 basis points to 23 basis points in 2010.
However, revenue margins in most regions
remained lower than they were before the crisis, while
cost-to-income ratios remained higher.
BCG defines AuM as including cash deposits,
money market funds, listed securities held directly or indirectly
through managed investments, and onshore and offshore assets. It
excludes investors’ own businesses, residences or luxury goods.
