Latest news with #WorldWealthReport
Yahoo
2 days ago
- Business
- Yahoo
There's Almost 600K More Millionaires. That's Not Necessarily a Good Thing
If you love something, let it go, the old saying goes … but an advisor probably didn't come up with that. The Great Wealth Transfer is already upon us, and while it's debatable exactly how much money will change hands over the next quarter of a century, most agree it is at least in the tens of trillions. Market researcher Capgemini estimates that $84 trillion will transfer to inheritors over the next 23 years. Additionally, the world's millionaire population increased by 600,000 last year — 94% of whom were in the US. That's good news for older clients' children, but the concern for advisors is that the vast majority of next-gen high net worth clients — 81% — will switch from their parents' wealth manager within two years after receiving their inheritance, according to Capgemini's latest World Wealth Report. Advisors are recognizing that what worked for a client might not work for their kids, who often want more aggressive investment strategies in their portfolios and access to digital interfaces with their wealth managers. 'The attrition rate should be a wake-up call for the industry,' said Kyle DePaolo, co-founder of DePaolo & May Strategic Wealth. 'Too many advisors focus solely on the primary wealth holder and neglect building trust and relevance with the next generation.' READ ALSO: Goldman, Morgan Stanley, JPMorgan Layoffs to Hit Northeast and Wedbush and Dan Ives Launch AI Revolution ETF While 81% does sound like a lot, it's not surprising that clients and their younger children would have different financial concerns and goals. While baby boomers are focused on wealth preservation, next-gen HNW clients are predominantly risk-takers, interested in assets such as private equity and cryptocurrency, the report found: Next-gen HNW clients look for comprehensive financial planning, or concierge service, and they seek out wealth managers who can advise on everything from portfolio management, to travel, to education, the report found. Younger clients also want an advisor they can seamlessly communicate with via multiple channels including phone calls, emails, and digital platforms. They have a strong preference for video calls. 'Firms that can successfully integrate digital-first services and enhance omnichannel experiences will have the upper hand in retaining, attracting, and delighting this population,' according to Capgemini. What Women Want. One thing to keep in mind is that before clients' children receive their inheritances, assets are often transferred to wives first as women tend to live longer than men. 'They also are likely to make a change in advisors if the current advisor has not been engaging and addressing her,' said Lisa Kirchenbauer, senior advisor at Omega Wealth Management. This post first appeared on The Daily Upside. To receive financial advisor news, market insights, and practice management essentials, subscribe to our free Advisor Upside newsletter. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Mint
5 days ago
- Business
- Mint
The world's richest are even richer because of the market's muscle
Surging US stock markets fueled the growth of wealth in North America last year, although fiscal instability, currency pressures, and more sluggish markets led to fewer wealthy folks in Europe, the Middle East, and Latin America, according to the Capgemini Research Institute. In North America, the ranks of those with at least $1 million in investible assets grew by 7.3% to 8.4 million last year, up from 7.9 million in 2023. As the S&P 500 rose more than 23%, the wealth held by these rich folks grew 8.9% to nearly $30 trillion, up from $27.5 trillion a year earlier, according to Capgemini's 29th annual World Wealth Report. Slower wealth growth outside North America shows up in Capgemini's worldwide figures. The numbers of wealthy individuals globally rose by only 2.6% last year to 23.4 million—that compares with a 5.1% gain in the number of wealthy people the year before to 22.8 million. Globally, the wealth of the world's richest grew by 4.2% to $90.5 trillion last year from $86.8 trillion a year earlier, Capgemini said. A good chunk of the rise was among the ultrarich—those with at least $30 million in investible assets—who gained 6.3% in assets and 6.2% in number to 234,000. This elite group represents only 1% of all wealthy individuals, but holds 34% of all the wealth, the firm said. A reason the ultrawealthy have experienced outsize gains is that they tend to invest all over the world, not just in their local markets, says Kartik Ramakrishnan, CEO of the financial services strategic business unit at Capgemini. 'They can go where they see opportunities for profit," Ramakrishnan says. Those with $1 million to $5 million in assets—a group Capgemini defines as the 'millionaires next door," however, tend to stick close to home with their investments, he says. According to the report, this segment also concentrated their assets in safer, lower-yielding investments last year, such as fixed-income and real estate. This conservative bent meant their ranks only grew by only 2.4%, when in 2023, the millionaires-next-door were the fastest-growing segment, adding 5.4% to their numbers. The effects of an orientation to local markets is evident in Europe, for instance, where the pan-European Stoxx 600 index rose only 5.9% in 2024. The continent's millionaires-next-door didn't capture the same sort of wealth gains as their U.S. counterparts, with wealth rising among this group by only 0.7% to $19 trillion in 2024, as the population of Europe's wealthy fell by 2.1% to 5.7 million, the report said. Globally, the wealthy have a 22% allocation to equities (up one percentage point from the previous year), a 19% allocation to real estate (same as 2023), and an 18% allocation to fixed-income (down two percentage points). The biggest allocation was 26% to cash, but that is likely because the survey is taken in January as investors gear up to deploy assets for the year, Ramakrishnan says. More intriguing is that the wealthiest have 15% of assets in alternative investments. Although that is the same level as in 2023, those surveyed revealed rising interest in such investments as private equity and private credit, in addition to cryptocurrencies, he says. Also, Capgemini's data show younger investors are already more invested in alternatives. Millennials (ages 28 to 43) surveyed have 17% of their assets in the sector, while Gen Z investors (ages 12-27) have 16%, compared with allocations of 14% each for both baby boomers (60 and older) and Gen X (ages 44-59), the survey found. It makes sense, however, that as investors become more experienced, and can think through strategic return estimates over time, they begin to realize there are opportunities in private markets they don't want to miss—particularly as more companies choose to remain private, says Kris Bitterly, global head of Citi Wealth at Work. 'Let's say that you want to invest in generative AI in some capacity—There are the big megacap players that are dominating the U.S. equity market and will probably continue to do so in some capacity, given their free cash flow generation, and given their ability to self fund and invest," says Bitterly, who was among wealth management execs serving as a steering committee member for the report. But for someone who wants to invest in companies developing the 'full ecosystem" of AI, 'that is going to be in private markets." Citi believes a modest-risk allocation to alternatives for is closer to 27%-28%, more than double a current level the firm sees of about 10%, 'even for investors who are familiar with alternatives." The generational split in how the wealthy invest is interesting to think about as wealth rapidly shifts from older to younger generations. Among those Capgemini surveyed, 30% expect to receive an inheritance by the end 2030, 63% expect to receive one by the end of 2035, and 84% expect to have their inheritance by 2040. UBS has said this great wealth transfer will total $83.5 trillion through 2048. Write to Abby Schultz at
Straits Times
5 days ago
- Business
- Straits Times
Frothy tech stock returns helped mint 600,000 millionaires in 2024
The US alone added 562,000 millionaires as enthusiasm for AI and interest rate cuts drove huge advances in the US stock market. PHOTO: AFP NEW YORK – Global wealth surged last year, with the number of millionaires across the world hitting a record 23.4 million. The annual World Wealth Report from Capgemini, an IT services and consulting group, shows the number of people with at least US$1 million (S$1.3 million) in investable assets grew 2.6 per cent in 2024, driven in large part by gains in American stock portfolios. The United States alone added 562,000 millionaires, a 7.6 per cent increase from the year prior, as enthusiasm for artificial intelligence and interest rate cuts drove huge advances in the US stock market. The gains were biggest among ultra-high net worth individuals – defined as having at least US$30 million in investable assets – with their wealth jumping nearly 12 per cent in the US. Elsewhere, the Asia Pacific region saw a 2.7 per cent gain in millionaires, attributed to a strong equities market and easing monetary policy, and the Middle East saw a 2.1 per cent decline due to lower oil prices. In Europe, market volatility and sluggish growth led to a consolidation of wealth at the very highest levels, with the number of individuals with US$30 million or more growing 3.5 per cent while the overall population of millionaires fell 2.1 per cent. Across all high-net worth portfolios, Capgemini said cash holdings remained steady, as did a 15 per cent allocation for alternative assets like private equity and cryptocurrency. Kris Bitterly, head of Citi Global Wealth at Work, said more investment exposure to alternatives could be key to unlocking future growth opportunities, especially with high-net worth individuals aiming to skirt lags in their local markets. 'Many investors, presently, when you look at their asset allocations, they're significantly underweight on alternatives,' Ms Bitterly said. Alternatives present 'unique opportunities that are not available in public markets that you want to express in your portfolio.' Capgemini's survey, administered in January 2025, included input from dozens of wealth managers and more than 6,000 high-net worth individuals across 71 countries. BLOOMBERG Join ST's Telegram channel and get the latest breaking news delivered to you.
Business Times
5 days ago
- Business
- Business Times
Frothy tech returns helped mint 600,000 millionaires last year
[NEW YORK] Global wealth surged last year, with the number of millionaires across the world hitting a record 23.4 million. The annual World Wealth Report from Capgemini, an IT services and consulting group, shows the number of people with at least US$1 million in investable assets grew 2.6 per cent in 2024, driven in large part by gains in American portfolios. The US alone added 562,000 millionaires, a 7.6 per cent increase from the year prior, as enthusiasm for artificial intelligence and interest rate cuts drove huge advances in the US stock market. The gains were biggest among ultra-high net worth individuals – defined as having at least US$30 million in investable assets – with their wealth jumping nearly 12 per cent in the US. Elsewhere, the Asia-Pacific region saw a 2.7 per cent gain in millionaires, attributed to a strong equities market and easing monetary policy, and the Middle East saw a 2.1 per cent decline due to lower oil prices. In Europe, market volatility and sluggish growth led to a consolidation of wealth at the very highest levels, with the number of individuals with US$30 million or more growing 3.5 per cent while the overall population of millionaires fell 2.1 per cent. Across all high-net-worth portfolios, Capgemini said cash holdings remained steady, as did a 15 per cent allocation for alternative assets such as private equity and cryptocurrency. Kris Bitterly, head of Citi Global Wealth at Work, said more investment exposure to alternatives could be key to unlocking future growth opportunities, especially with high-net-worth individuals aiming to skirt lags in their local markets. 'Many investors, presently, when you look at their asset allocations, they are significantly underweight on alternatives,' Bitterly said. Alternatives present 'unique opportunities that are not available in public markets that you want to express in your portfolio'. Capgemini's survey, administered in January 2025, included input from dozens of wealth managers and more than 6,000 high-net-worth individuals across 71 countries. BLOOMBERG
Bloomberg
5 days ago
- Business
- Bloomberg
Frothy Tech Returns Helped Mint 600,000 Millionaires Last Year
Global wealth surged last year, with the number of millionaires across the world hitting a record 23.4 million. The annual World Wealth Report from Capgemini, an IT services and consulting group, shows the number of people with at least $1 million in investable assets grew 2.6% in 2024, driven in large part by gains in American portfolios.
