[A previous version of this blog post cited a report from Boston Consulting Group with numbers from 2012. This post has been updated to reflect the latest wealth numbers for 2013.]
Boston Consulting Group’s annual report on wealth management this week notes rebounding equity markets boosted global private financial wealth 8.7% in 2013 to $152 trillion.
The total number of millionaire households hit 16.3 million, or 1.1% of all households in 2013. The U.S. had the most millionaire households, at 7.1 million, followed by China, with 2.4 million. Japan fell to third with 1.2 million millionaire households.
Offshore wealth, assets held in a country where the investor doesn’t have legal residence, rose to $8.9 trillion. The overall share of private wealth held offshore fell to 5.9% of total global private financial wealth.
Switzerland is still the most popular destination for offshore wealth, with $2.3 trillion resting comfortable alongside cows, chocolate and cuckoo clocks in 2013.
However, Singapore and Hong Kong are expected to see their share grow as more wealth is created in the Asia-Pacific region. The two locations are expected to hold roughly 20 percent of global offshore wealth by the end of 2018, vs. 16 percent in 2013. After the Asian wealth centers, which hold $1.4 trillion in offshore assets, come Panama and the Caribbean, with $1.2 trillion. The Channel Islands and Dublin, Ireland, are fourth, with $1.1 trillion. The U.K. rounds out the top five homes for offshore assets with $1 trillion.
BCG’s 2012 study noted that offshore wealth remains “viable” because clients in the high-net-worth segment (at least $1 million in wealth) and the ultra-high-net-worth segment (at least $100 million) “will continue to seek diversification, along with broad private-banking capabilities, specialized expertise, high-quality service, discretion, and domiciles with relatively high levels of economic and political stability.” However, “offshore wealth management as an industry remains under intense and increasing pressure, particularly from tax authorities in the U.S. and Western Europe.”
– Tom Bemis