Global Wealth Dynamics: High Net Worth Individuals Shift Trends

High net worth individuals (HNIs) are increasing their control of global financial wealth, significantly changing wealth management preferences. Notably, Asia and the Middle East are leading in HNI wealth growth. A rise in professional wealth management and alternative investments marks a shift in global wealth dynamics, as observed by Avendus.

High net worth individuals (HNIs) are anticipated to expand their control over global financial wealth from 48% to 55% in the coming years, as per a report by Avendus. This ascent in wealth concentration marks a considerable growth from 41% in 2013, highlighting a significant alteration in global financial dynamics.

The wealth of HNIs has surged, surpassing the growth in their numbers. Regions such as Asia and the Middle East lead in HNI wealth expansion, boasting an 8% long-term growth rate. The Americas still have the largest number of HNIs holding assets over USD 1 million, yet Asia-Pacific is expected to be pivotal in future wealth creation due to its increasing mid-affluent populace.

There is a marked change in wealth management preferences among HNIs. Today, less than half opt for self-management as financial markets grow in complexity, driving over half towards professional wealth management. This professional trend, which saw a 7.6% global rise in 2021, prioritizes services such as investment, inheritance, tax planning, and real estate advice.

HNIs are also diversifying their portfolios, favoring alternative assets like private equity, which comprise 20% of asset management's global AUM. These investments are gaining traction for higher returns and the unique benefits available through professional platforms. This ongoing shift towards professional and alternative management continues to redefine global wealth structures.

(With inputs from agencies.)