The worlds wealthy have bounced back in terms of assets, numbers and confidence, and are showing a renewed willingness to work with a single advisor, presenting new opportunities for the top advisors serving that group.
The global population of high net worth individuals grew 9.2%, reaching 12.0 million, according to the World Wealth Report from RBC Wealth Management and Capgemini. North Americas population of 3.73 million high net worth individuals surpassed Asia-Pacifics 3.68 million, and North America also remained the wealthiest region with $12.7 trillion in assets among the high net worth compared to $12.0 trillion in the Asia-Pacific region, the report said. Global assets held by high net worth (over $1 million in investable assets) individuals leapt up 10% in 2012 to a record of $46.2 trillion, marking a turnaround from 2011 when assets fell 1.7%.
This growth will cause the greatest impact in the business of advisors and firms catering to the wealthiest tier of high net worth clients. Growth was strongest among ultra-high net worth individuals with over $30 million in assets. After their financial assets fell by 5% from 2010 to 2011, they rose 10.9% the next year. Overall, that group comprises 35.2% of the global high net worth wealth group.
Meanwhile, the percent of high net worth clients who said they have a high degree of trust and confidence in their wealth manager jumped to 61.2% for the first quarter of 2013, up 4.2% from a year earlier. Confidence in wealth management firms also rose by 3.5% since the first quarter last year to 61.4%, according to the survey.
As confidence rose, the wealthiest clients were becoming more comfortable with the idea of relying more heavily on one advisor. Forty-one percent of high net worth individuals globally wanted to work with a single firm as opposed to multiple firms, and that number was higher in North America where 53% wanted to work with a single firm, according to the survey. Since the financial crisis of 2008, clients had been focused on diversifying their assets across advisors and firms, but are now looking to streamline their finances as the markets settle, John Taft, CEO of the U.S. division of RBC Wealth Management Taft said at a briefing on the report in New York.
This represents one of the most surprising survey results, given the pervasive industry assumption that [high net worth individuals] are happy to work with multiple firms, the report stated. Wealth management firms with universal banking models able to offer a wide breadth of trusted expertise through a seamless process will likely be the beneficiaries of this trend.