(May 15 – 16:20 ET) – Merrill Lynch sees a bright future ahead for wealth management, with the world’s high-net-worth individuals growing their wealth by more than 12% annually to US$44.9 trillion by 2004.
The Merrill Lynch/Gemini Consulting World Wealth Report found that the wealth of high-net-worth investors (those with financial assets exceeding US$1 million) grew by 18% in 1999 to US$25.5 trillion worldwide. It attributes this growth to strong global economic performance and stock-market growth. It also found strong growth in the number of ultra-high-net-worth people (those with US$30 million or more in financial assets), thanks primarily to the tech-stock boom.
“This group of individuals has increasingly sophisticated demands requiring private banks to provide a greater diversity of product and highly specialized advice,” said Winthrop Smith, Jr., president of Merrill Lynch’s International Private Client Group.
While Asian wealth grew fastest in 1999, North American and European wealth continues to account for the lion’s share of global wealth, growing at 17.4% and 19% respectively. The projected 12% growth will come through continued economic prosperity and the expansion of existing financial assets, but also from the fact that high-net-worth individuals are likely to invest a higher proportion of their assets in higher-risk, higher-yielding financial instruments such as equities and venture capital.
The report found that “new money” has a shorter investing horizon than its “old money” counterparts, is less risk-averse, insists on top performance and is far more demanding. Ultra-high-net-worth individuals have more sophisticated needs, including “highly structured and bespoke products,” consolidated financial performance information, special advisory services (such as international tax and legal information), and cutting-edge information delivery.
-IE Staff