The daily bad news flow concerning the developed economies and the aggrandizement of the emerging markets makes it easy to forget that the vast majority of the world’s affluent still inhabit the West, and most people in the emerging markets still live in poverty. 

According to a contrarian study from research company TNS, although emerging markets are becoming “centres of affluence”, 80 per cent of the world’s wealthy still live in the developed world - painting a timely picture of wealth, post-global recession. In the survey of 12,000 families, wealthy was defined as a household with more than $100,000 of investible assets. 

While small, rich countries like Luxemburg have a greater concentration of wealthy per capita, (29 per cent) and Singapore (a fifth), there are huge contrasts in markets with large populations. While 27 per cent of the US are affluent, this falls to around 1 per cent in India and China – a sign of the broad-reaching extremes of wealth and poverty which pervades these countries, highlighting a need for precise marketing strategies to reach the right audience.

“When examining global incidence of affluence, it’s not only size that matters. We wanted to identify the growth potential of each market – and our research confirms that emerging markets will become new centres of affluence in coming years. India and China have already surpassed major European markets like Germany and France. It’s interesting to see that the entrepreneurial spirit of people in these markets is already paying off in terms of personal wealth,” said Reg van Steen, director business and finance, TNS.

Nevertheless, on a country-by-country basis some emerging markets are overtaking European ones. While the United States still ranks as the world’s most prosperous country, with 31 million affluent households, the study reveals that the emerging economies of India and China have overtaken many European countries in this measure of consumer wealth.

Based on interviews with 12,000 people across 24 markets including China, Brazil and India, TNS’s Global Affluent Investor study shows that the growth of developing economic powerhouses is already starting to impact personal fortunes, among households with more than $100,000 investable assets.

Emerging investor appetite

The survey also shows that emerging markets now rival their developed counterparts in terms of the amount that people have to invest. UAE and India appear in the top five countries where the affluent have more than $1 million investable assets on average, alongside Singapore and Hong Kong. The only Europeans in the top five are the Swedish, whilst the UK and France are the least likely in Europe to have these levels of investable assets.

Fundamental social shifts in age and demographic are highlighted in the report. While they average 57 years old in North America and Northern Europe, this falls to the early 40s in Australia, Singapore and Hong Kong. While men are the primary decision makers among affluent households in India (80 per cent men) and Central Europe (79 per cent), the balance is spread far more evenly in North America (45 per cent men).

TNS’s findings also demonstrate regional contrasts in terms of what the affluent actually invest in. While the Chinese, Indian and German affluent are keen investors in precious metals (cited by 35 per cent, 33 per cent and 23 per cent of respondents respectively), this falls to just 3 per cent in Sweden, Norway and the Netherlands, and 2 per cent in Denmark and Israel.

“Despite today’s pan-global financial trends, it’s important to recognise the diversity in local preferences when it comes to asset allocation. We detected big differences between markets, even when they border each other geographically: only 5 per cent of Norwegians invest in bonds, compared to 31 per cent of the Swedes. And while the popularity of commodities fluctuates at a global level, they are very popular among India’s affluent. These are the insights that make all the difference when trying to engage the wealthy with a specific product or service,” said Reg van Steen.