The United States saw a significant increase in millionaires last year, with 600,000 new millionaires added to the population. Capgemini’s report showed that America’s millionaire population grew by 7.3% in 2023, reaching 7.5 million people with a combined fortune of $26.1 trillion. The increasing wealth at the top of the ladder is particularly notable, with the number of Americans worth $30 million or more growing by 7.5% to 100,000 individuals.
Globally, the number of millionaires also increased, reaching 22.8 million people with a total wealth of $86.8 trillion. While North America saw the highest growth in millionaires, Asia-Pacific and Europe followed closely behind. However, the U.S. remains dominant in terms of wealth creation, surpassing Asia once again.
Wealthy individuals are shifting their investments from safe assets to more aggressive growth opportunities. Cash holdings have decreased, while fixed income and real estate investments have increased. Stocks remain a popular investment option, though wealthy investors are hesitant to rely solely on a market driven by tech stocks. Private equity and private credit are expected to see significant inflows from wealthy investors in 2024.
As wealth and the population of the wealthy continue to grow, the competition in managing their fortunes is becoming increasingly fierce. Firms that can best serve ultra-high net worth clients, those worth $30 million or more, are likely to be the most successful. Understanding the clients on a deeper level, providing value-added services, and offering a full suite of financial and nonfinancial products will be key to attracting and retaining ultra-wealthy clients.
The ultra-wealthy are increasingly turning to family offices for managing their wealth, citing reasons such as better privacy, personalization, and independence. Wealth management firms will need to adapt by offering a comprehensive range of services and becoming better partners to compete with family offices effectively. Providing global advice, multiple financial services, lifestyle advice, insurance solutions, and next-generation education will be crucial for success in the wealth management industry.
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