The dominant source of wealth for the world’s richest people is from entrepreneurship rather than inheritance, according to a separate report yesterday by London-based Barclays Plc. Wealth is being created twice as quickly in developing regions such as Asia-Pacific and Africa, where it took rich people an average of 12 years and 16 years, respectively, to accumulate their assets, the Barclays study found.
Cautious Wealthy
A Pew Research Center study in April found that while the U.S. economy has recovered for households with net worth of $500,000 or more, the recession continues for almost everyone else. Wealthy U.S. households boosted their net worth by about 21 percent between 2009 and 2011 as the rest of America lost 4.9 percent of household wealth during that period, the Pew study found.
The world’s affluent remained cautious in 2012, with a focus on preserving assets, according to the report from Capgemini and Royal Bank’s RBC Wealth Management unit, which surveyed more than 4,400 high-net-worth individuals. A third were primarily focused on preserving wealth, while 26 percent sought to increase assets. Almost 30 percent of high-net-worth wealth was held in cash and deposits, the report found.
“Despite a marked focus on capital preservation and high cash allocations, high-net-worth individuals achieved a record level of wealth in 2012, suggesting further growth lies ahead if trust and confidence in the markets increases further,” George Lewis, group head of RBC Wealth Management and RBC Insurance, said in the statement.
Asset Allocations
Millionaires in the Middle East and Africa were the most focused on wealth accumulation, with about 42 percent making asset growth a priority compared with 33 percent seeking preservation, the study found.
North America’s wealthy held most of their assets in equities, at 37 percent, while those in Latin America and Asia- Pacific, excluding Japan, preferred property. Latin America’s rich had 30 percent of their portfolios in real estate, compared with 25 percent for Asia-Pacific. Millionaires in Europe favored cash and real estate, allocating 27 percent to each.
Capgemini and RBC Wealth Management compiled data from 71 countries accounting for 98 percent of global gross national income. Toronto-based RBC Wealth Management manages more than C$369 billion ($361.5 billion) for customers globally.