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HNWIs wealth reaches unprecedented levels

The Capgemini Research Institute's World Wealth Report 2024, released today, shows high-net-worth individuals (HNWIs) and their wealth hit unprecedented levels in 2023, driven by a rebound in the global economic outlook.

According to the report, global HNWI wealth grew by 4.7% in 2023, reaching $86.8 trillion. Additionally, the HNWI population increased by 5.1% to 22.8 million worldwide, continuing to expand despite market volatility. This growth reverses the previous year's decline, putting HNWI trends back on an upward trajectory.

In 2023, North America saw the strongest HNWI recovery globally, with wealth and population increasing by 7.2% and 7.1%, respectively. The report attributes this momentum to solid economic resilience, easing inflationary pressures, and a robust rally in the US equity market. While this trend continues in most regions, the Asia-Pacific HNWI segment experienced more modest growth, with wealth and population rising by 4.2% and 4.8%, respectively.

As the growth of HNWIs continues, asset allocations are transitioning from wealth preservation to growth. Early 2024 data shows a normalisation of cash holdings to 25% of portfolio totals, a significant decrease from the multi-decade high of 34% in January 2023.

The report highlighted that two out of three HNWIs plan to increase their investments in private equity during 2024, aiming to capitalise on potential future growth opportunities.

Ultra-high-net-worth individuals (UHNWIs), the most concentrated group among the wealthy, hold over 34% of total HNWI wealth but constitute just over 1% of the total HNWI population. It's projected that over the next two decades, ageing generations will transfer more than $80 trillion, spurring demand for both financial services (such as investment management and tax planning) and non-financial services (including philanthropy, concierge services, passion investments, and networking opportunities).

The report also indicated that 78% of UHNWIs view value-added services as essential, and over 77% rely on their wealth management firms for support with inter-generational wealth transfer. However, as HNWIs seek more tailored guidance, 65% express concerns about the lack of personalised advice suited to their evolving financial situations.

Read more: HNWIWealthCapgemini Research Institute