The report shows the United States and Europe will continue to have the greatest concentrations of wealth, even as emerging markets narrow the gap, but that China is expected to “continue to be the driving force in the growth of millionaire wealth”, followed by Brazil and Russia.
Of the 25 countries examined in The Next Decade in Global Wealth Among Millionaire Households, China and South Korea will join the top 10 countries in terms of the total number of millionaires by 2020, the Deloitte research suggests.
The Deloitte study, which focuses on the emerging opportunities for wealth managers such a wealth of wealthy people presents, provides estimates of the number of households which have a net wealth above the $1m, $5m and $30m mark in each of the 25 economies.
Andrew Freeman, executive director of the Deloitte Center for Financial Services, said the company’s researchers “wanted to go beyond some existing wealth management statistics by looking both into the future and across the globe, to forecast how wealth among millionaire households might evolve”.
By identifying and understanding how different market segments are changing, he explained, experts can help formulate growth strategies for businesses that cater to such wealthy individuals.
“Which countries may offer the most promising future, and how wealth managers can potentially increase profitability in the next decade, are important questions for a wide range of financial institutions,” Freeman said.
“These days it’s about a lot more than just a few private banks. Each wealth manager needs to consider their individual footprint, and see where it might make sense to capitalise on expected long-term shifts.
“While there may be enormous growth in the mass affluent sector, many of those customers may also be migrating into the millionaire category.”
Among the Deloitte report’s other key findings:
• While Switzerland may have the highest per capita wealth overall of the countries studied – with $4.2m in 2011, Singapore may rank No. 1 in 2015 and 2020, with $4.5m and $5.4m, respectively, in per capita wealth.
• Australia may make an entry into the top 10 in 2020 with 1.6 million millionaire households; the country is also projected to experience the fastest growth rate of the developed economies.
• The wealth of millionaire households in the US could reach $87trn in 2020, up from $39trn in 2011.
• In 2020, 43% of the world’s wealth held by millionaire households is predicted to be in the US. While this is only a slight increase from 42% presently, the number of millionaire households in the country is projected to increase from an estimated 10.5 million in 2011 to 20.6 million in 2020.
• Among the forecasts for each of the individual 50 US states, California – in spite of its financial problems – is expected to remain the state with the wealthiest households, while New Jersey will continue to have the greatest density of millionaires per square mile. The East Coast could see the highest growth rates; New York and Florida will together add 1.5 million new millionaire households by 2020.
The 24 economies outside the U.S. included in the report are: Australia, Brazil, Canada, China, France, Germany, Hong Kong, India, Italy, Japan, Malaysia, Mexico, the Netherlands, Norway, Poland, Russia, Singapore, South Korea, Spain, Sweden, Switzerland, Taiwan, Turkey and the United Kingdom.
For the purposes of this study, “wealth” includes financial assets (stocks, bonds and other investments) and non-financial assets, including primary residence, durables, business ownership and other assets. In order to maximise the reliability of estimates, the analysis relies solely on actual data sources.
The Next Decade in Global Wealth Among Millionaire Households was conducted by the Deloitte Center for Financial Services, in association with Oxford Economics, a forcasting consultancy. Copies of the executive summary and other information may be found here.
