Wealth in India is all set to grow at 14% between 2010 and 2015 with the country?s assets under management (AUM) accounting for 8% of the overall increase in AUM. India is among the group of four countries including the UK, US and China that have shown the largest absolute gains in wealth.
AUM includes cash deposits, money market funds, listed securities held directly or indirectly through managed investments, and onshore and offshore assets. It excludes wealth attributed to investors? own businesses, residences, or luxury goods.
According to global management consulting firm Boston Consulting Group?s global wealth report 2011 ? ?Shaping a new tomorrow: How to capitalise on the momentum of change? ? India ranks 12th in the number of millionnaire households at 150,000. This was driven by private wealth, which grew at more than double the global average in the Asia-Pacific region. India experienced exceptional growth of 21.6% in AUM while the Pacific region reported the highest growth rate in family wealth across the world during 2010.
The findings of the report are based on a comprehensive market-sizing study and a benchmarking survey of 120 wealth managers around the world. The report, the 11th in this series, includes close-ups of two wealth markets ? Asia-Pacific and Latin America ? along with an in-depth look at pricing and a special focus on Islamic wealth management.
The report noted that wealth climbed by 8 % in 2010 to $121.8 trillion or about $20 trillion from the levels two years earlier, despite the global financial crisis.
Interestingly, the assets of Swiss offshore banks remained almost unchanged in 2010 as negative market performance cancelled out a gain in net new assets.
Moreover, the amount of offshore wealth ? defined as assets booked in a country where the investor has no legal residence or tax domicile ? increased to $7.8 trillion in 2010, up from $7.5 trillion in 2009. At the same time, however, the percentage of wealth held offshore slipped to 6.4 %, down from 6.6 % in 2009, due to strong asset growth in countries where offshore wealth is less prominent, such as China, as well as stricter regulations in Europe and North America, which prompted clients to move their wealth back onshore.
Offshore wealth managers, in particular, face significant challenges given the strong push to increase tax transparency, the report added.
?In this environment, a wealth manager?s adaptability ? its capacity to anticipate and respond to a combination of regulatory, client-driven and competitive changes ? will ultimately determine how well it prospers from the continued growth of wealth,? the report said.
?Offshore private banking remains a tumultuous part of the business,? said Anna Zakrzewski, a BCG principal and a co-author of the report. ?The relative importance of offshore centres is changing rapidly. Some are benefiting from continued asset growth, while others are suffering large asset outflows.?