Global private wealth has been growing fast in recent years, exceeding economic growth worldwide. With the number of millionaires reaching 24 million in 2019, and the Fintech industry offering new services to people with more limited amounts of disposable income, the value of assets held by the private wealth managers increased significantly in the last decade.
According to data gathered by Buy Shares, the total value of the global private wealth surged by 80% in the last ten years, reaching $226.4trn in 2019.
North America Holds 45% of the Global Private Wealth
In 2010, the combined value of assets held by the private wealth managers amounted to $133.3trn, revealed the BCG Global Wealth 2020 report. Almost 60% of that amount occurred in cash and deposits and life insurance and pensions.
Despite the European sovereign debt crisis, the private wealth hit $180trn value in 2015, a 35% jump in five years. The increasing trend continued in the following years, with the total value of assets in the private wealth management sector reaching $207trn in 2018.
Statistics indicate that in 2019, the value of the private wealth has witnessed the most significant increase in the last two decades, growing by $19trn year-on-year, and reaching $226.4trn globally.
Analyzed by geography, North America represents the leading region holding $100trn or 45% of the global private wealth last year. The amount of private wealth in Western Europe, the second-largest region globally, reached $46.8trn in 2019, a $10.1trn increase in six years. Asia, Japan, and Latin America follow, with $42.1trn, $17.6trn, and $5.6trn value, respectively.
However, statistics indicate the “growth markets” of Asia, Eastern Europe, Latin America, and the Middle East and Africa witnessed rapid expansion in the last decades, driven by strong GDP performance and higher rates of individual savings. In 2009, these markets held 17.3% of the global private wealth. Mature markets, including Japan, North America, Oceania, and Western Europe, held 82.7% of the global private wealth assets. By the end of 2019, the growing markets increased their share to 25.3%, while the mature markets held 74.7% of the global private wealth.
Switzerland Accounts for One-quarter of Global Cross Border Wealth
The BCG Global Wealth 2020 report also revealed that cross-border wealth surged over the past 20 years, growing from $3.1 trillion in 1999 to $9.6 trillion in 2019. However, this figure is expected to decline by 5.4% to 10.2% in 2020, driven by capital markets’ performance.
In 2019, Western Europe accounted for 24% of the global cross-border wealth. This figure is expected to drop below 20% by 2024. However, Asia’s share of cross-border wealth is set to reach 40% in the next four years. The Middle East and Latin America are also forecast to witness their share of cross-border wealth grow slightly faster than the global average.
Statistics show Switzerland remains the leading destination, accounting for $2.4trn or one-quarter of global cross-border wealth in 2019. With a $1.9trn value of assets, Hong Kong ranked as the second-largest hub for cross-border wealth. Singapore, the United States, and the Channel Islands follow with $1.1trn, $0.8trn, and $0.5trn, respectively.
Economic recovery from the COVID-19 pandemic will define the growth of global private wealth in the following years. In the case of the slow recovery, the survey predicts the global private wealth to fall to $215trn in 2020 and then grow to $265trn in 2024.
The lasting damage scenario is forecast to cause a drop to $210 trillion in 2020. In that case, the global private wealth is expected to increase to $243trn in 2024, growing by CARG of 1.4%.