The population of high-net-worth-individual (HNWI) in the US rose by 8.6% to reach 4.4 million in 2014 and their overall wealth increased by 9.4% to reach $15.2 trillion, maintaining its status as the largest HNWI market globally, according to the US Wealth Report 2015 released by Capgemini.
According to the report, strong equity market performance and GDP growth propelled HNWI population increases in the 12 largest US metropolitan statistical areas (MSAs). The 12 US cities – Boston, Chicago, Dallas, Detroit, Houston, Los Angeles, New York, Philadelphia, San Francisco, San Jose, Seattle, and Washington, D.C. – represent two thirds of the US HNWI population.
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The report says that the investable wealth of HNWIs in these cities grew by $1 trillion (10%) to $11.4 trillion during 2014.
While New York remains the city with the highest HNWI population overall, the top six cities for HNWI growth were in Texas and the West Coast, driven by strong real estate market.
US HNWIs represent 29% of new HNWI global wealth since 2008.
However, despite robust growth in US wealth, younger and wealthier HNWIs show lower levels of trust and confidence in their advisors. Nearly 85% of US HNWIs under-40, nearly 10 percentage points more than HNWIs over-40, said they are more likely to leave their wealth managers or firm if their needs are not being met.
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By GlobalDataThe study found that attitudes, concerns, and investment activities of HNWIs under-30 in the US are even more pronounced than those of under-40 HNWIs.
In particular, younger HNWIs in the U.S. are also seeking more sophisticated financial planning services, including global investing on top of strong preferences for digital offerings and automated advice platforms.
Capgemini Financial Services vice president of banking Sankar Krishnan said: "The habits of younger and wealthier US HNWIs and demand for digital services point to the shifting dynamic of the traditional wealth manager-HNWI relationship.
"Established wealth management firms that are able to combine high-quality advice delivered both directly from agents as well as from automated platforms will have the opportunity to raise their profile and secure market share from all segments of the US HNWI population."
When queried about automated advisors, over 87% of under-40 US HNWIs said they expect all or most of their wealth management relationship to be conducted digitally in the next five years. Even nearly 50% of over-40 HNWIs also preferred digital channels.
The report added that US HNWIs are willing to allocate an estimated $1.5 trillion of assets to automated advisors by 2017.
