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Global Wealth Market Continues to Grow—But at a Slower Pace

Paul Das

25 May 2005

The global wealth market continued to grow in 2004, although the pace of growth is beginning to slow, according to the Boston Consultancy Group, a management consultancy. BCG, which will release a report on the global wealth market later this year, said there was also a higher than average growth both among the wealthiest investors and among the mass affluent. The mass affluent, which BCG has categorised as those with $250,000 to $1 million in assets under management, saw their average wealth rise by 20 per cent in 2004. “This growth highlights the importance of both the ultra-high net worth market and the mass affluent market for competitors with ambitions in the global wealth market,” said Victor Aerni, a director in BCG's Zurich office, who is leading this year's wealth project. In North America, the wealth market grew 8 per cent to $31.1 billion in assets under management in 2004, with the US accounting for $29.4 billion of that wealth. But the growth rate was considerably lower than in 2003. Wealthier investors in the US saw their assets increase rapidly, according to BCG. The average number of households with more than $20 million in assets under management grew by 3,000 a year over the last three years to total 40,000 at the end of 2004. The mass affluent sector in the US did particularly well, with an increase in assets under management of more than 20 per cent in 2004, although US investors with less than $250,000 in assets under management saw less growth. In Europe, the weakness of the US dollar drove expansion in assets under management, ensuring heady growth in the market when measured in dollar terms. The largest six European wealth markets—the UK, France, Germany, Italy, Spain, and Switzerland—together grew on average by about 12 per cent to $23 trillion in assets under management in 2004. When expressed in euros, however, assets under management rose by just over 4 per cent to €17 trillion. There was solid growth at the high end of the market. In Germany, for example, the number of households with more than $20 million in assets under management grew by 1,000 a year from 2001 through 2004 to total 5,000. PricewaterhouseCoopers will release its report on the global private banking market in early June. This is expected to show very rapid growth in the private banking markets of the Middle East and Asia. The report will also explore the theme of alternative investments. A few days after the release of the PwC report, the Wealth Report is released by Merrill Lynch/CapGemini report is published.