SINGAPORE, June 19 -- The United States and Japan led the growth in the population of individuals with no less than 1 million U.S. dollars of investable wealth as their equity and real estate markets outperformed, according to a wealth management report released Thursday.
The report by consultancy Capgemini and the RBC Wealth Management, a unit of Royal Bank of Canada, also showed that China 's number of high net worth individuals (HNWIs), or individuals with investable wealth of 1 million U.S. dollars or above, grew by a strong 17.8 percent, thanks to the stable growth of the Chinese economy.
"Chinese gross domestic product (GDP) growth is slowing but the growth rate of China's high net worth population was 17.8 percent. So the growth story in China is not over," Claire Sauvanaud, vice president of Capgemini Financial Services, told a press conference in Singapore.
The world's total population of high net worth individuals grew by 14.7 percent to 13.7 million, which means that near 2 million individuals joined the ranks of millionaires.
The 14.7 percent growth was also the fastest since 2000, except for the post-crisis recovery year of 2009.
The report said that the year 2013 marked "a slow return to normalcy that is beginning to take shape following years of economic upheaval" despite the lackluster global economic growth figure.
"Instead of the uncertainty that has reigned for so long, 2013 was marked by fledgling indications of recovery: a still-shaky but notable improvement in the eurozone, an aggressive shift away from deflation in Japan, stable growth in China, and growing momentum in the U.S. and U.K. economies," the report said.
The number of high net worth individuals in the United States grew by 16.6 percent year on year to 4.01 million in 2013. They account for 29 percent of the global population of millionaires.
Japan's HNWI population surged by 22.3 percent to 2.33 million last year, following a more modest annualized growth of 4.6 percent from 2007 to 2012. This is largely attributable to " significant returns in the equity and real estate markets on the strength of positive sentiment and better economic performance, especially during the first half of 2013," the report said.
Germany, which had the third highest number of high net worth individuals after only the United States and Japan, saw a growth of 11.4 percent in its HNWI population.
Asia Pacific led the growth in high net worth population growth at 18.2 percent, followed by North America, Middle East and Europe at 17.1 percent, 16.7 percent and 13.7 percent, respectively. Latin America recorded only a growth of 2.1 percent in its high net worth population.
"In Latin America, the economies of Mexico, Brazil and Argentina faced internal issues of inflation and low investor confidence, in addition to slowing demand for commodity exports from across the globe," the report said.
The investable wealth of the world's high net worth population grew by 13.8 percent to 52.62 trillion U.S. dollars in 2013. It has grown by 61 percent over the past five years since 2008.
The investable wealth of the high net worth population in Latin America is also more concentrated in the ultra HNWIs, or those with investable wealth of over 30 million U.S. dollars.
The authors of the report said that they expected the investable wealth of the global high net worth population to grow by 6.9 percent annually through 2016 to hit 64.3 percent trillion U.S. dollars.
Asia Pacific is expected to be the leader with an annual growth rate of 9.8 percent, and it is expected to "overtake North America in HNWI population in 2014, and in HNWI wealth by 2015," the report said.
The high net worth population of Asia Pacific overtook that of North America for the first time in 2011 as it increased to 3.37 million while that of North America slightly declined to 3.35 million. However, it fell behind North America again in 2012. In 2013, it narrowed the gap with its high net worth population in Asia Pacific increasing to 4.32 million while that of North America going up to 4.33 million.
The world's rich are investing more globally, allocating over a third of their investable wealth outside their home region in early 2014, up from 25 percent in 2013.
The digital technologies are also expected to transform the wealth management industry, with 65 percent of the high net worth population expecting to run most or all of their wealth relationships digitally in five years.
Two thirds of the millionaires said that they would consider leaving their wealth management firm if an integrated experience is not provided.
This will give the wealth management industry both challenges and potential opportunities, said Stefan Mueller, managing director and head of investments and products, Asia, at the Royal Bank of Canada Wealth Management.
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