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Global Wealth & Where We Stand Today

Posted by Elaine W. Leon on 17 April 2017

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As discussed in the previous blog, both high-net-worth and ultra-high-net-worth individuals are on the rise. Let’s examine a little closer in detail as to what this exactly means. With the help of Wealth-X research, we have learned that there are 199,235 UHNW individuals across the world. When their wealth is combined, it equals to that of $27.8 trillion.  These individuals have increased a whopping 6.3% in the last year alone.

 

Wealth-X was also able to break down this group of individual’s profile. One interesting fact is that the UHNW population is predominately men, they make up 88 percent of the group. Women on the other hand only make up 12 percent of the UHNW group. In The Complete Family Office Handbook, Chapter 1, it discusses in detail a breakdown of the UHNW profile.

Although that the global wealth seemed to be on an upward trend, it actually took a dip in 2012-2013. There was a reduction in wealth by 1.8 percent. Yet, by 2013 there were signs of recovery and the population grew once more. This reduction in the UHNW group was due to the ongoing financial crisis in the Eurozone as well as the slowing down of emerging economies.

While the UHNW individuals are on the rise, billionaires are the slowest to increase. That doesn’t mean that this group has not increased its wealth, it has, and by $326 billion. Billionaires only make up 1% of the UHNW population, but they account for 23% of the world’s UHNW total wealth.

Even though these interesting statistics help us put into perspective the general population of those who are wealthy enough to have a family office, one important question remains: “How many affluent families have a family office?"

The Family Office Exchange (FOX) estimates that more than 3000 families in the US have family offices. It seems a low number. What could be one of the reasons why many families are not opting for a family office? Unfortunately, many are misinformed about the logistics of a family office. In our next blog series, we will learn how much it takes to fund a family office and why UHNW individuals should start to consider establishing a family office.