Millionaires in North America Regain Top Spot From Asia

North America reclaimed the top spot with the most millionaires last year, beating Asia as the world’s ultra-rich pushed global wealth to a record high, according to a report by Cap Gemini SA and Royal Bank of Canada.

People in North America with at least $1 million in investable assets climbed 11.5 percent to 3.73 million in 2012, according to the 17th annual World Wealth Report. High-net-worth individuals in the Asia-Pacific region, which overtook North America a year earlier, increased 9.4 percent to 3.68 million, boosted by Singapore and Hong Kong.

The combined wealth of the world’s millionaires rose 10 percent to a record $46.2 trillion last year, after declining 1.7 percent in 2011. North America remained the richest region with $12.7 trillion of high-net-worth assets, compared with $12 trillion in Asia-Pacific where the wealthy are expected to retake the top spot in “the very near future” and lead growth over the next three years, according to the study.

“Both the U.S. and Canada benefited from marginal GDP growth as well as equity and real estate markets,” Jean Lassignardie, chief sales and marketing officer for Paris-based Capgemini Global Financial Services, said at a press conference in New York yesterday when the report was released. Still, Asia-Pacific’s total wealth increased 12.2 percent, outpacing North America’s 11.7 percent growth, he said.

The increase in wealth was led by the super-rich, those with at least $30 million to invest, whose assets and numbers rose by about 11 percent following declines in 2011, according to the report.

Latin America

The MSCI World Index, which tracks global stocks in developed and emerging markets, climbed 13 percent in 2012 and has advanced 11 percent this year. The MSCI AC Asia Pacific Index jumped 14 percent last year and is up 2.8 percent in 2013.

All regions had strong gains in high-net-worth populations and wealth except Latin America, which faltered amid slow economic growth and “challenged” equity markets, according to the report. The population of millionaires worldwide rose 9.2 percent to 12 million, the report showed.

In Europe, the high-net-worth population increased 7.5 percent to 3.41 million and their wealth climbed 8.2 percent to $10.9 trillion, the study found.

In Asia, Hong Kong’s number of high-net-worth individuals climbed 36 percent to 114,000 people worth a combined $560 billion, the report stated. Singapore’s jumped 10 percent to 101,000 with wealth of $489 billion.

Global wealth will grow at 6.5 percent annually over the next three years, led by the 9.8 percent increase from the Asia-Pacific region, according to the report. Assets of the high-net-worth are projected to reach $55.8 trillion in 2015.

Wealthy Entrepreneurs

The dominant source of wealth for the world’s richest people is from entrepreneurship rather than inheritance, according to a separate report this week by London-based Barclays Plc. Wealth is being created twice as quickly in developing regions such as Asia-Pacific and Africa, where it took rich people an average of 12 years and 16 years, respectively, to accumulate their assets, the study found.

A Pew Research Center study in April found that while the U.S. economy has recovered for households with net worth of $500,000 or more, the recession continues for almost everyone else. Wealthy U.S. households boosted their net worth by about 21 percent between 2009 and 2011 as the rest of America lost 4.9 percent of household wealth, the Pew study found.

“Asia’s wealth generation is less dependent on markets,” Barend Janssens, head of RBC Wealth Management’s emerging markets division, told reporters in Singapore today, citing the region’s entrepreneurship. That compares with “the Western world where they manage a lot of inherited money. That creates the potential to grow very quickly.”

Cautious Rich

The world’s affluent remained cautious in 2012, with a focus on preserving assets, according to the report from Capgemini and Royal Bank’s RBC Wealth Management unit, which surveyed more than 4,400 high-net-worth individuals. A third were primarily focused on preserving wealth, while 26 percent sought to increase assets. Almost 30 percent of high-net-worth wealth was held in cash and deposits, the report found.

Millionaires in the Middle East and Africa were the most focused on wealth accumulation, with about 42 percent making asset growth a priority compared with 33 percent seeking preservation, the study found.

North America’s wealthy held most of their assets in equities, at 37 percent, while those in Latin America and Asia-Pacific, excluding Japan, preferred property. Latin America’s rich had 30 percent of their portfolios in real estate, compared with 25 percent for Asia-Pacific. Millionaires in Europe favored cash and real estate, allocating 27 percent to each.

Capgemini and RBC Wealth Management compiled data from 71 countries accounting for 98 percent of global gross national income. Toronto-based RBC Wealth Management manages more than C$369 billion ($361 billion) for customers globally.

(Updates with RBC comment in 13th paragraph.)
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