Your rich clients are getting richer

The world’s wealthy are the wealthiest they’ve ever been.

The Capgemini and RBC Wealth Management 2013 World Wealth Report, released today, finds global high-net-worth (HNW) wealth grew 10% in 2012, reaching a record high of $46.2 trillion. Asia-Pacific led overall growth.

The key drivers? Strong global market performance and growing consumer confidence.

There are now 1 million more wealthy people and the elite population grew by 9.2% worldwide to reach 12 million. Meanwhile, North America reclaims its position as the region with most HNW individuals, though it’s predicted Asia-Pacific will again launch ahead in the next few years.

Read: U.S. household wealth rebounds

George Lewis, RBC Wealth Management group head, explains North America returns to No. 1 because last year, the region “had the highest exposure of equity. S&P 500 saw its highest annual return last year since 2009.”

But Asia-Pacific will become dominant once more because, Lewis says, it “has a large number of the fastest-growing markets. Overall, wealth is tied to GDP growth and we expect it to be stronger there than North America.”

Read: New sectors will drive Asia’s growth

Closer to home, population of Canadian HNWIs grew by 6.5% to 298,100 investors with $1 million or more worth of assets to invest. The report found Canadians are most confident about increasing wealth with 87% anticipating a higher return on investments, which was well above the global average of 75% expecting growth.

David Agnew, CEO of RBC Wealth Management Canada, says Canadians are poised to be more confident because of the strength and stability of the nation’s political and economic systems, and because of our strong compliance culture. He expects to see “less cash next year when we meet again and HNWIs taking advantage of capital markets,” another nod to investors moving away from cash back into equities.

Read: Diversity reigns among wealthy Canadians

About their investment advisors, HNWIs are highly confident in their wealth managers, another driving factor of positive outlook on portfolio growth. Nearly half of those studied said they prefer to deal with one firm and one main person as the point of contact. A growing number of clients also prefer digital communication. Almost a quarter of HNWIs reported they like e-contact over face-to-face.

Amidst all the regulatory changes in the world, David Wilson, Capgemini head of strategic analysis group, noted wealth managers must play a bigger role in helping clients understand compliance, and firms must develop and continue a culture of compliance from top to bottom. “Clients are willing to pay more for a great reputation so it’s not a good idea to get it wrong,” says Wilson.

Read: Advising the wealthy retiree

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.