There are more High Net-Worth Individuals (HNWIs) in the Asia-Pacific Region than there are in North America, according to a new survey released this week. According to the study, carried out by consultants Capgemini and RBC Wealth Management, the Asia-Pacific Region has returned to the top place for millionaires which it last held in 2011.
The announcement comes with a note of caution, however. The study was carried out between December 2014 and February 2015, and thus has not taken account of the slump in China’s stock market this summer. Capgemini believe that it will be another few months before it becomes clear whether this will have any effect on the overall long-term picture.
Certainly, before this summer’s woes the Asia-Pacific Region was booming, largely thanks to China’s economic strength. In the six months to June, Chinese stocks more than doubled. But the improvement in the region’s prosperity was not solely thanks to China; rising wealth was recorded in India, Indonesia and Thailand, too.
In the period in question, the poll of over 5,000 people worldwide showed that the number of HNWIs in the Asia-Pacific Region rose by more than 11% to 4.672 million. This indicates that there are almost six and a half thousand more millionaires in Asia-Pacific compared to in the USA and Canada combined.
In terms of the total amount of wealth, however, North America still comes out on top. It’s estimated that HNWIs and UHNWIs hold a total of $56.4 trillion; and the largest share of this – 28.8% – is in the hands of individuals in North America. The wealthy of Asia-Pacific account for 28.1%. Those based in Europe hold 23% of this wealth.
Asia’s millionaires, the study also shows, tend to handle their money differently from the way their American counterparts do. They are more likely to keep cash – whereas in the rest of the world equities dominate – and they are more ready to take credit: credit accounts for more than a quarter of their assets, compared to the global average of 18.2%. According to RBC Wealth Management, this is because many of Asia’s HNWIs are also business owners and are accustomed to using credit.
Analysts will continue to watch closely developments in China in particular, and not only because of the recent stock market slump. High domestic savings rates in China were funnelled into investments in manufacturing, which caused severe over-capacity issues in domestic industry and a prolonged effort by Beijing to rebalance the economy toward consumption. But the hitherto high level of savings may already have peaked, and may fall significantly as increasing numbers of workers retire. A working paper released by the National Bureau of Economic Research on Monday projected that savings rates in China could decline by some 12% between now and 2050 as the working-age population begins to decline.
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