Last year, the Russian mass affluent segment shrank by 17.5 per cent year-on-year and lost RUR800 billion ($27.2 billion), according to annual research by Russia's New Economic School and Citigold, the wealth management arm of Citigroup’s Moscow-headquartered subsidiary.

In 2009, the size of the mass affluent segment in Russia fell from 1.2 million to 990, 000 individuals, while the total amount of investable wealth held by this group dropped from RUR4.2 trillion to RUR3.4 trillion, the report said.

The mass affluent segment has survived the crisis and is expected to become one of the drivers of Russia's future economic growth, it continued.

The analysis of the impact of the financial crisis on the Russian mass affluent segment has revealed new development trends, the report said.

The number of wealthy individuals will return to the pre-crisis level as early as within a year. Furthermore, under an optimistic scenario, this number will grow annually by 5.5 per cent over the next five years. However, a more conservative estimate shows that annual growth of the mass affluent segment will be 2.5 per cent.

“In Russia this segment has been growing as quickly as in other BRIC countries over the past few years, even though Russians' conservative behaviour is a reminder that it is more typical of the developed countries in Europe,” Zdenek Turek, head of Citi in Russia and the CIS, said in the report.

“Another distinctive feature of the Russian mass affluent class is ‘patriotism’ - despite the fact that affluent Russian individuals make significant investments overseas, a certain part of their wealth goes into international securities issued by Russian companies. Going forward, when the Russian private investment infrastructure reaches the international level, these funds may become an additional source of investments into the country's economy,” he said.

Additional findings:

Based on answers given by 20,000 randomly selected Citigold customers across Russia, NES and Citigold found that almost 70 per cent of mass affluent Russians keep 90 to 100 per cent of their investable wealth in deposits.

Wealthy investors fall into three main behavioural types. “Well-off strivers” (25-40 years old) often use low-risk products (deposits) but at the same time are ready to try more risky investments. “Savers” (40 years and older) seek stability and invest in deposits. “Risk Takers” (40 years and older) are ready to take on risk for the sake of additional income.

More than 20 per cent of mass affluent individuals in Russia have investments overseas. Also, mass affluent individuals are becoming more active in managing their investments. In 2009 they invested into the stock market independently (through brokerages) more often than through mutual funds.

"The mass affluent segment has lost less than expected during the crisis due to its conservative investment strategy, as well as, to a certain degree, underdevelopment of the Russian financial market. Currently, mass affluent individuals generate 25 per cent of the country's income and account for 30 per cent of all bank deposits in Russia, which indicates the significant role they play in the country's economy. According to our estimates, the funds they have accumulated will greatly contribute to the restoration of domestic consumption and re-launching the economic growth," said Sergei Guriev, rector of the New Economic School.

The mass affluent segment includes individuals who have investable wealth of between RUR1.3 and RUR13 million (as of end-2008). The wealth critereria for mass affluent selection are adjusted for inflation each year.