Although this is simply a report and does not bring this future into existence, current trends suggest more millionaire population would soon sprout across Asia, Africa, and Latin America. This is according to Boston Consulting Group (BCG)’s 19th annual analysis of the global wealth-management industry released this week.
Here Is How
- BCG found that Global wealth grew by 1.6 percent in 2018. The fastest growth was in Africa, Asia, Eastern Europe, and Central Asia, Latin America.
- “Strong inflows” into life insurance and pension funds in South Africa, Mexico, and Brazil buoyed growth in Africa and Latin America, BCG found.
- Although BCG’s report found that gains in personal financial wealth slowed by about 5 percentage points in 2018 compared to the previous five years — due to factors like the fourth-quarter drop in major stock indexes, this new analysis predicts it will pick up again slightly over the next five years — with Asia poised to add new millionaires faster than anywhere else.
- BCG expects Asia and Africa will see the highest growth rates between 2018 and 2023. By then, private banking revenue pools in Asia could even exceed those in Western Europe.
- Presently, the greatest concentration of millionaires (measured in U.S. dollars) is currently in North America. But BCG projects that Asia will see the fastest growth in its millionaire population between 2018 and 2023.
After Asia, Africa, And Latin America
The report notes that the total number of millionaires around the world is expected to rise from 22.1 million to 27.6 million by 2023. Trailing Asia, the report predicts that Africa and Latin America will see the most growth in their respective millionaire populations.
Currently, half of all global wealth is held by millionaires according to the report. Analysts projected that wealthy individuals with assets between $20 million and $100 million will see the greatest increase of wealth through 2023, with an expected compound annual growth rate of 8.6 percent.
Targeting that group could be “a golden opportunity for wealth managers willing to tailor their service and coverage models to clients’ needs,” according to the report.
The Fluctuating Wealth In North America
The BCG found that in North America, wealth dropped by 0.4 percent in 2018. This was because high-net-worth individuals in North America and Western Europe were most affected by drops in major market indexes which affected equities and investment funds. However, unlike in North America, wealth did grow in Western Europe, but only by 0.6 percent as growth in some countries offset a decline in others.
BCG predicts the U.S. will see positive growth through 2023, with wealth in North America overall projected to grow by 5.4 percent to $118 trillion. They expect growth in North America will eventually outpace Western Europe and Japan.
Globally, the analysis projects wealth will grow at a compound rate of 5.7 percent between 2018 and 2023, which would still be slightly slower compared to recent years.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.