Asia-Pacific Dominates As World’s Richest Region

Lisa Smith, BA (Hons), CeFA
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The Asia Pacific has more high net worth individuals both in number and the amount of money they have.

The region is on target to surpass $40 trillion in net worth by 2025, according to analysts Capgemini.

In the last year, the number of HNWI was up 7.4%, while the money they controlled increased by 8.4%, but the rate of increase is slowing, says the firm’s Asia-Pacific Wealth Report for 2017.

In 2015, the HNWI population in the region grew by 9.4%, while their wealth surged by just under 10%.

At the same time, the cash under wealth management surged by 33%.

Slowing growth

The powerhouses of the region are China and Japan, which together account for 73% of the HNWI population and 68% of their wealth.

But a GPD slowdown in both countries is holding back HNWI growth. China slipped to only the 33rd fastest-growing nation, while Japan only managed 41st place.

In 2016, only the United States added more HNWIs (337,000) than Japan (171,000) and China (95,000), but the Asia-Pacific leads North America by 360,000 HNWIs and $863 billion in HNWI wealth.

The study also reveals that HNWIs in the Asia Pacific but excluding Japan, hold 45% of their assets offshore compared to 42% in the rest of the world. Typically, a HNWI from the Asia-Pacific holds around a third of their wealth overseas.

Economic insecurity

Economic insecurity leads Asia-Pacific HNWIs to send their wealth abroad, says the report.

While more assets are held outside their home, they also stash more cash in the bank than their counterparts worldwide, at 25% as opposed to 22%.

Although wealth management returns were good, HNWIs in the Asia-Pacific distrust their advisers over concerns about transparency and fees.

Anirban Bose, Head of Global Banking and Capital Markets at Capgemini said: “We project that Asia-Pacific will surpass $40 trillion in HNWI wealth by 2025 if Emerging Asia capitalises on its tremendous potential to grow at 12.9% annually – exceeding the 10.2% rate of 2016 – and if Mature Asia grows at 6.4% or higher, which it accomplished in 2016 at 6.9%.”

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