Asia-Pacific Region is Fertile Ground for Wealth Creation
NEW YORK (MainStreet) The greatest wealth creation in the world is happening in the Asia-Pacific region, which has seen growth of high net worth individuals increase at double and triple the rates of the rest of world over the past five years. A study fielded by Capgemini and RBC Wealth Management found that Asia-Pacific expanded its super-rich population by 9.4% to reach 3.68 million, building wealth by 12.2% to reach $12 trillion.
"The Asia-Pacific market is clearly one to watch. Its leadership in global high net worth wealth growth positions it to become the largest wealth market by population as early as 2014," said M. George Lewis of RBC Wealth Management. "Asia-Pacific's robust growth in 2012 builds on over five years of consistent outperformance. The region's high net worth population and wealth has increased by 31% and 27% respectively since 2007, far outpacing growth in the rest of the world of 14% and 9%."
North America is the largest wealth market, seeing growth by 11.5% to reach 3.73 million; but the report forecasts that Asia-Pacific is expected to reclaim the top spot by 2015.
"GDP growth of 5.5%, which is more than double the global average, combined with strong equity market performance across the region and strong real estate market performance in some markets, drove robust growth in Asia-Pacific's HNWI population and wealth in 2012," added Jean Lassignardie, with Capgemini Global Financial Services. "This GDP growth rate is projected to drive Asia-Pacific's growth in HNWI population and wealth through 2014."
Hong Kong and India saw the most significant gains in their super-wealthy population and wealth last year, following steep declines in 2011. Hong Kong's high net worth population grew by 35.7% and their wealth by 37.2%, while India's population grew by 22.2% and their wealth by 23.4%.
Japan and Taiwan saw slower wealth creation with single-digit increases in high net worth population, at 4.4% and 7% respectively.
According to reports, almost 80% of wealthy individuals in Asia-Pacific, excluding Japan, have a high degree of trust for their wealth managers and firms, compared with about two-thirds of the richest investors in the rest of world. More than two-thirds (69.4%) have high confidence in financial markets and 72.2% in regulators, as well -- compared with just 44.6% and 38.3% of wealthy individuals in other regions. Investors in India and China have the highest trust levels, followed, in order, by those in Singapore, Hong Kong, and Australia. Japan's wealthiest proved an exception to the overall confidence trend, with less than a third having trust in key industry stakeholders.
In line with overall high trust levels, the outlook for Asia-Pacific (ex-Japan) investors is extremely positive; with 90.5% confident they can build more wealth in the near future, led by those in India (95.7%) and China (95.2%).
By Hal M. Bundrick for MainStreet