Area's high- worth population up 7.3% year over year to 2.4 million in '05. There were 2.4 million high-net-worth individuals in the Asian-Pacific region in 2005. This represents a 7.3% increase over the number of high-net-worth individuals in the region in 2004 and accounts for about 27% of the worldwide total, according to Capgemini and Merrill Lynch, which has just released an Asia-Pacific Wealth Report as a "regional extension" of the 2006 World Wealth Report the two firms published in June 2006.

Opportunities

"The findings of the Asia-Pacific Wealth Report reinforce many of the themes that we have long-championed for this part of the world," says Raymundo Yu, head of Merrill's Global Private Client group outside the Americas. "The future of the wealth-management industry in Asia holds many exciting opportunities as the region is home to some of the world's fastest-growing economies."

The report puts five Asian-Pacific markets among the 10 fastest-growing millionaire populations worldwide. The number of ultra high-net-worth individuals -- the report's publisher's define as having at least $30 million in net financial assets, jumped by 12.1% to 15,600 in 2005 -- a year the Asia-Pacific Wealth Report says epitomized "the world's slowing trend following 2003's crest."

The growth in Asia's high-net-worth and ultra-high-net-worth populations is in major part due to a strong economic surge in the region. South Korea, India and Indonesia have the world's three fastest-growing high-net-worth populations. Japan -- a decidedly mature market -- is home to more than half of the Asia Pacific region's high-net-worth individuals. Taken together, China and Japan hold more than 65% of the region's total $7.6 trillion in high-wealth assets.

Individual millionaires in Asia-Pacific are fairly well diversified in terms of asset allocation, with a preference for equities and alternative investments. "[Though] they exhibited a preference for sophisticated alternative investments, Asia-Pacific [high-net-worth individuals] sought to offset higher-risk investments by holding a significant portion of their assets in more conservative asset classes," says Yu.

But the report warns of potential pitfalls arising from underdeveloped capital markets, inadequete capital controls, currency inconvertibility -- especially troublesome in China -- and overly strict licensing requirements.

Here's a link to the Asia-Pacific Wealth Report. -FWR

.