While global wealth has recovered almost to what it was before the global economic crisis, the performance of wealth managers has not.

This was the headline news at the Boston Consulting Group’s Global Wealth 2010 press briefing in New York Thursday, where the results of the firm’s tenth annual Global Wealth report Regaining Lost Ground: Resurgent Markets and New Opportunities, was released.

According to the study, assets under management rose 11.5% to $111.5 trillion last year, after falling 10% a year earlier. The number of millionaire households rose 14% last year.

“This sounds like a good story overall, but there is still a lot of frustration, a lot of concern and to wealth managers it doesn’t sound like they are back in business,” said Bruce Holley, a senior partner at the firm and leader of asset and wealth management in North America.

Wealth managers are struggling to pick up the pieces as revenues slid and margins shrunk last year, a sign that client trust has not been restored to 2007 levels. The firm surveyed 114 wealth management institutions globally and found that although assets under management increased by an average of 14.3% in 2009, revenues declined by an average of 7.3%. Meanwhile, the average costs of wealth managers declined by 3.2% last year, not enough to offset the fall in revenues, and increasing the average cost-to-income ratio to 74.4%, up from 72.3% in 2008.

A number of factors contributed to the decline in performance, the report said, including a lower number of transactions, tougher price negotiations, and the shift of assets to lower-margin products.

“Investors have started moving assets out of safe havens, but they still have a lot of wealth parked in basic, low-margin products,” said Anna Zakrzewski, a BCG principal and co-author of the report. “Their asset allocations tend to be more conservative than their actual risk profiles. In addition, the use of discretionary mandates is down, as investors remain wary of signing over control of their wealth.”

Nonetheless, the number of millionaires grew, with the United States topping the list with the most number of millionaire households (4.7 million). At the same time, wealth became slightly more concentrated, the report said. Less than 1% of all households were millionaires, but they owned 38% of the world’s wealth, up from 36% in 2008.

While North America had the largest gain in wealth at 15%, or $4.6 trillion, and Asia-Pacific, excluding Japan, had the second largest gain in absolute terms, soaring 22%, or $3.1 trillion, North America and Japan were the only regions where wealth remained below pre-crisis levels, the report said.

Meanwhile, Latin America had the second-highest growth rate at 16% and Europe remained the wealthiest region, with $37.1 trillion in assets under management, or a third of the world’s wealth.

“Assets under management have recovered much faster than we expected, but revenues have not,” said Monish Kumar, global leader of asset and wealth management at Boston Consulting Group. “There’s a lot of money sitting on the sidelines.”

The good news is that the firm forecasts that global wealth will grow at an average annual rate of almost 6% from the end of 2009 through 2014, less than growth in 2009, but higher than the 4.8% it grew annually from the end of 2004 through 2009. Tjun Tang, Boston Consulting Group’s expert on wealth management in Asia and a co-author on the report, said that that wealth will grow even faster in emerging markets with Asia-Pacific, excluding Japan, to grow at almost twice the global rate, increasing its share of global wealth from 15% in 2009 to almost 20% in 2014.

According to the report, global wealth recovery last year can be attributed to soaring financial markets and increased savings. Yet Federico Muxi, a principal at the firm and expert on wealth management in Latin America, said although wealth in equities returned to pre-crisis levels, the majority of wealth is held in cash and deposits.

The same is true in Asia-Pacific, where the asset mix remains highly conservative, with nearly 60% of wealth in cash and deposits, Tang said.

“The largest competitor to wealth managers in Asia is cash rather than each other,” he said.