'World's richest got even richer last year'

Font Size

Print

Feedback

Email

Discuss

Related Articles

Citigroup liquidates its CSO fund: ReportHP sees stronger-than-expected 2009GE Capital plans to cut costs by $2 bn in 2009Bid for CC-Amatil compelling: Lion Nathan

The old saying holds true: The rich do get richer.

Even as world financial markets broke down last year, personal wealth around the world grew 5 per cent to $109.5 trillion, according to a global wealth report released on Thursday by Boston Consulting Group.

It was the sixth consecutive year of expanding wealth. The fastest growth was among households in developing regions, such as China and the Gulf States and among families who were already rich.

That wealth also is increasingly concentrated among the richest.

The top 1 per cent of all households owned 35 per cent of the world's wealth last year. Meanwhile, the top 0.001 per cent, ultra-rich households holding at least $5 million in assets, commanded $21 trillion -- a fifth of the world's wealth.

The planet also continues to mint new millionaires rapidly. The biggest jumps in 2007 came from emerging countries in Asia and Latin America. Overall, the number of millionaire households grew 11 per cent to 10.7 million last year.

BCG notes that, while the rich are still rich, they have been making some adjustments as a result of the financial crisis.

This year, assets are being shifted to more conservative investments, more money is being kept onshore in home markets and some individuals have curtailed new investment.

Yet BCG cautioned the outlook for wealth markets and the banks who serve them, is dimmed by the current financial crisis.

North American personal wealth growth slowed to 3.8 per cent last year, compared with 9 per cent in 2006, reflecting the the mortgage crisis and the onset of the credit crunch last summer.

"The financial crisis continue to cast a pall over established wealth markets," said Victor Aerni, a Zurich based partner who coauthored the report.

BCG, which advises banks and wealth managers, forecasts personal wealth will continue growing, but at a slower pace. This year, with Wall Street suffering through one of its worst slumps in decades, growth in assets is expected to rise less than 1 per cent.

Things will improve over the next five years, BCG said, with personal wealth growing more than 3 per cent annually -- well off the 8.5 per cent set between 2002 and 2007.