The rich are getting richer and that too at a fast clip. Led by the rebound in the global markets and a positive outlook for the foreseeable near-term, the world's High Net-Worth Individuals (HNWI) hit record levels of wealth in the past year.
The reading, according to Capgemini Research Institute's World Wealth Report 2024, shows that the list of millionaires swelled to 22.8 million globally in 2023, an increase of 5.1% annually.
Rich Needs Help To Stay Rich
The dependance on financial assistance and guidance has grown among the Ultra High Net-Worth Individuals (UHNWI) recently, according to the report. This is substantiated by the number of wealth management company services availed going up from three in 2020 to seven in 2023.
The trend also showed an increase in UHNWI population's need for a range of services, as their trajectory and goals evolve constantly.
Rich Getting Richer, Again
The richest have been on a roll as these individuals have not only recovered but have also managed to expand their wealth in 2023.
According to the report, global HNWI wealth expanded by 4.7% in 2023 reaching $86.8 trillion.
"The ultra-HNWI segment (investors with USD 30 million+) enjoyed the most robust recovery," the report also notes.
HNWIs Cautiously Optimistic
The asset mix of the HNWI has been a balance of asset preservation and growth as the fixed income saw a 5% increase this year.
Real estate trade and holding of the HNWI has increased to 19% this year from 15% in 2023. Alternative investments also show a 2% increase in 2024, from the 13% it was at last year.
Value-Added Services Crucial
Concierge services was ranked first by HNWI in the non-financial value added services that they avail. Ultra-HNWIs prioritize value-added services, with 78% considering them essential in maintaining their lifestyle, according to the report.
Networking opportunities, legal consultation and lifestyle advice follow closely on list as well.
AI Meets Behavioural Finance
With the wealth management firms pushing to provide a larger range of services to their clients, the survey reported that artificial intelligence or AI has helped these firms provide personalised services to their clients.
The wealth management companies have integrated behavioural finance and AI and this had enabled the firms in the hyper-personalisation of relationship in client experiences and communications, the report said.
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