Capgemini World Wealth Report 2023: HNW Population at 21.7 Million with $83 Trillion Global Wealth, 210,000 UHNWs Representing 1% of HNW Population & 34% of HNW Wealth, Top 2 Goals are Wealth Preservation & Wealth Growth
10th June 2023 | Hong Kong
Capgemini has released the World Wealth Report 2023, providing key insights into HWW Wealth, HNW Population, Wealth Management & Private Banking platforms, HNWs clients (high net worth), Relationship Managers, Wealth Managers & Private Bankers. In 2022, the total global HNW population is at 21.7 million with $83 trillion global wealth, and 210,000 UHNWs representing 1% of HNW population & 34% of HNW wealth. Both HNW population (-3.3%) & HNW wealth (-3.6%) decreased in 2022. The HNW top 2 Goals are Wealth Preservation (67%) & Wealth Growth (63%). In 2022, HNW Asset Allocation are in Cash & cash equivalents (34%), Equities (23%), Fixed income (15%), Real estate (15%), Alternative investments (13%). 56% (APAC: 65%) of HNWs select their Wealth Management firms based on valued-added services such as tax planning, inheritance advice, estate management, and legal consultation. The HNW Top 3 preferred channels to search for services are In-person (32%), Phone (22%), Website (22%). Relationship Managers (Wealth Managers, Private Bankers) time allocation – 33% on Core activities, 67% Non-core activities. Relationship Managers Top 5 time spent – HR & Trainings 13%, Portfolio management 11%, Onboarding 11%, Tax & compliance 10%, Loans 10%. Wealth Management firm cost-to-income ratio – Average around 65% to 70%. Wealth Management Executives Top 5 Priorities – Improve client experience, Investing to support changing client demands, Upgrading technology infrastructure, Partnerships with WealthTechs and ecosystem players, Expand services to the affluent segment. Affluent Clients in Asia-Pacific on managing wealth – Rely on independent wealth managers (58%), Manage own wealth (25%), Retail Banks (10%). See below for key summary & findings | View report here.
“ HNW Population at 21.7 Million with $83 Trillion Global Wealth, 210,000 UHNWs Representing 1% of HNW Population & 34% of HNW Wealth, Top 2 Goals are Wealth Preservation & Wealth Growth “
High Net-Worth Individual ~ Investable assets of >USD 1 million, excluding primary residence, collectibles, consumables, consumer durables
Affluent ~ Wealth band with investable assets typically between USD 250,000 and USD 1 million
Nilesh Vaidya, Capgemini Global Head of Banking and Capital Markets: “Wealth management firms are at a critical inflection point as the macroenvironment is forcing a shift in mindset and business models to drive sustainable revenue growth. Agility and adaptability are going to be key for high-net-worth individuals as their attention gears towards wealth preservation. The industry will need to fortify value, empower relationship managers, and unlock new growth opportunities to remain relevant. Their success will be tied towards solving issues relating to digital immaturity in the wealth value chain.”
Executive Steering Committee (Private Banks)
- Annabel Spring, HSBC Global Private Banking & Wealth CEO
- Greg Gatesman, Morgan Stanley Head of International Wealth Management
- Sabine Caudron, Degroof Petercam Head of Private Banking
- Sanjoy Sen DBS Managing Director & Group Head of Consumer Bank
- Melanie Aimer, Barclays Private Bank Head of International Banking & Global Head of Client Experience
Capgemini World Wealth Report 2023
Capgemini has released the World Wealth Report 2023, providing key insights into HWW Wealth, HNW Population, Wealth Management & Private Banking platforms, HNWs clients (high net worth), Relationship Managers, Wealth Managers & Private Bankers.
Summary
- Total HNW Population – 21.7 million
- Total Global Wealth – $83 trillion (2021: $86 trillion)
- HNWs ($1 million to $5 million) – 19.5 million (89.9%)
- Mid-tier HNWs ($5 million to $30 million) – 1.97 million (9.1%)
- UHNWs (>$30 million) – 210,000 (1% of HNW Population)
- APAC HNW Population – 7.1 million representing 32% of global population ($24.7 trillion Wealth, 29% of global)
- Share of HNW Wealth – UHNWs (1% owns 34%), Mid-tier HNWs (9.1% owns 22.7%), HNWs (89.99% owns 43.3%)
- 2022 HNW Population Change: – 3.3%
- 2022 HNW Wealth Change: -3.6%
Summary – HNW, Relationship Managers, Wealth Mgmt Industry & Affluent Clients Insights:
- HNW Top 2 Goals – Wealth Preservation (67%), Wealth Growth (63%)
- HNW Asset Allocation & Investments – Cash & cash equivalents (34%), Equities (23%), Fixed income (15%), Real estate (15%), Alternative investments (13%)
- ESG Investment Returns – 40% (same as non-ESG), 27% (lower than non-ESG), 23% (higher), 11% (unclear)
- HNWs likely switch Wealth Management providers in the next 12 months – 31%
- HNWs Selecting Wealth Management Firms based on Valued-added services such as tax planning, inheritance advice, estate management, legal consultation – 56% (APAC: 65%)
- HNWs recommend their Wealth Management firms to their friends, relatives, and colleagues – 25%
- HNW Top 3 preferred channels to Search for services – In-person (32%), Phone (22%), Website (22%)
- HNW Top 3 preferred channels for Advice (portfolio) – Phone (27%), In-person (25%), Video (22%)
- HNW Top 3 preferred channels for Queries & concerns – Phone (28%), In-person (23%), Website (20%)
- HNWIs satisfied with Relationship Manager to deliver value-added services – Around 50%
- Relationship Managers feedback personalizing client engagement is challenging, inability to individualize advice & deliver value-added services – 50%
- Wealth Management Executives satisfied with revenue growth per Relationship Manager – 37%
- Relationship Managers (Wealth Managers, Private Bankers) time allocation: 33% on Core activities, 67% Non-core activities
- Relationship Managers Top 5 time spent – HR & Trainings 13%, Portfolio management 11%, Onboarding 11%, Tax & compliance 10%, Loans 10%
- Wealth Management firm cost-to-income ratio – Average around 65% to 70%
- Wealth Management Executives Top 5 Priorities – Improve client experience, Investing to support changing client demands, Upgrading technology infrastructure, Partnerships with WealthTechs and ecosystem players, Expand services to the affluent segment
- Wealth Management Executives Supporting ESG investments Top 5 – Launching ESG-related products & offerings, ESG factors embedded across the investment portfolio, Educating employees on ESG, Thought leadership on ESG, Collecting & analyzing ESG data
- Affluent Clients in Asia-Pacific on managing wealth – Rely on independent wealth managers (58%), Manage own wealth (25%), Retail Banks (10%)
- Affluent clients like wealth management services from their retail banks – 71%
- Affluent clients look to relationship managers for investment advice – 57%
- Affluent clients expect value-added services, including tax planning, mortgage management, portfolio management, and other advisory services – Around 33%
Capgemini World Wealth Report 2023
1) 2022 HNW Population & Wealth
- Total HNW Population – 21.7 million
- Total Global Wealth – $83 trillion (2021: $86 trillion)
HNW Segment:
- UHNWs (>$30 million) – 210,000 (1% of HNW Population)
- Mid-tier HNWs ($5 million to $30 million) – 1.97 million (9.1%)
- HNWs ($1 million to $5 million) – 19.5 million (89.9%)
Share of HNW Wealth:
- UHNWs – 1% population owns 34% of wealth
- Mid-tier HNWs – 9.1% owns 22.7%
- HNWs – 89.99% owns 43.3%
2022 HNW Population:
- Global – 21.7 million
- North America – 7.4 million
- Europe – 5.6 million
- APAC – 7.1 million
- Middle East – 900k
- Latin America – 600k
- Africa – 200k
2022 HNW Wealth:
- Global – $83 trillion (2021: $86 trillion)
- North America – $25.6 trillion
- Europe – $18.2 trillion
- APAC – $24.7 trillion
- Middle East – $3.4 trillion
- Latin America – $9.2 trillion
- Africa – $1.9 trillion
2022 HNW Population Change:
- Global: -3.3%
- North America: -6.9%
- Europe: 2%
- APAC: -2%
- Middle East: +2.8%
- Latin America: +4.7%
- Africa: +4.3%
2022 HNW Wealth Change:
- Global: -3.6%
- North America: -7.4%
- Europe: 3.2%
- APAC: -2.7%
- Middle East: +1.5%
- Latin America: +2.1%
- Africa: +1.6%
2) HNW Asset Allocation & Investments
HNW Asset Allocation (Jan 2023):
- Cash & cash equivalents – 34%
- Equities – 23%
- Fixed income – 15%
- Real estate – 15%
- Alternative investments – 13%
Top HNW Goals:
- Prioritised wealth preservation – 67%
- Wealth growth as leading goal – 63%
- Investing for ESG impact as a top priority – 41%
HNW Investor insights:
- Equities – Growth focus (tech stocks) transitioned to value stocks.
- Cash – Rising interest rates & high inflation have made returns on cash and cash equivalents more attractive, and are less risky.
- Alternative Investments – Share of alternative investments in the portfolio mix remained static in 2022 (category allocations shifted). 1/3 of 95 wealth management executives surveyed in 14 markets to add more alternative investment products to portfolios in 2023
- Hedge funds – In 2022, hedge funds posted their worst performance since 2018. 42% of Relationship Managers said clients remain interested in hedge funds.
- Private equity – 46% of the over 800 Relationship Managers in 9 markets said private equity (PE) offerings are generating increased interest among clients.
- Commodities – Top performers in light of supply risks sparked by eastern European geopolitical upheaval. 2022 2H, slowing global economy, eroding household consumption, and weak business confidence led to a back slide in commodities value.
- Digital assets – Wealth Management Executives not ready to embrace digital assets as essential portfolio components. But, growing interest among HNWIs and as a result are exploring safer digital investments, such as tokenized assets.
3 ESG (Environmental, Social & Governance)
ESG Investment Returns:
- Reported returns from ESG-linked assets were similar to those from non-ESG-linked assets – 40%
- Reported returns were lower than non-ESG-linked assets – 27%
- Reported ESG-related returns were higher than non-ESG-linked assets – 23%
- Unclear on returns from investments in ESG-linked assets – 11%
HNWIs and Wealth Management firms remain interested in ESG products:
- 63% requested reliable and traceable ESG scores for their assets
- Around 50% – need more ESG information to engage effectively with clients
- 40% needed more data to understand ESG impact
- 78% of wealth management executives reported firm holding ESG-linked assets
- 9% plan to offer more ESG products
4) HNW Clients
HNWs Selecting Wealth Management Firms:
Value-added services influence selection of a wealth management firm (e.g., tax planning, inheritance advice, estate management, legal consultation):
- Global – 56%
- North America – 71%
- APAC – 65%
HNWs on Switching / Recommending Firms:
- HNWs likely switch Wealth Management providers in the next 12 months – 31%
- HNWs recommend their Wealth Management firms to their friends, relatives, and colleagues – 25%
HNW Top 3 preferred channels for interaction:
- Searching for services – In-person (32%), Phone (22%), Website (22%)
- Onboarding – Website (26%), Phone (23%), Video (21%)
- Advice (portfolio) – Phone (27%), In-person (25%), Video (22%)
- Queries & concerns – Phone (28%), In-person (23%), Website (20%)
- Transactions – Website (26%), Phone (23%), In-person (20%)
- Access portfolio – Website (30%), Phone (22%), In-person (16%), Video (16%)
- Market updates – Website (30%), Phone (23%), Video (18%)
- Personalised updates – Website (29%), Phone (22%), Mobile App (17%), Video (17%)
- Expert advice – In-person (27%), Phone (25%), Website (20%)
5) Relationship Managers (Wealth Managers, Private Bankers)
Relationship Managers:
- HNWIs satisfied with Relationship Manager to deliver value-added services – Around 50%
- Relationship Managers feedback personalizing client engagement is challenging, inability to individualize advice & deliver value-added services – 50%
- Wealth Management executives satisfied with revenue growth per Relationship Manager – 37%
Relationship Managers (Wealth Managers, Private Bankers) time allocation:
- *Core activities – 33%
- Non-core activities – 67%
Relationship Managers Time spent:
- HR & Trainings – 13%
- *Portfolio management – 11%
- Onboarding – 11%
- Tax & compliance – 10%
- Loans – 10%
- *Client interactions – 9%
- Investment order execution – 8%
- Internal administration – 8%
- Market & product knowledge – 7%
- *Commercial preparation & investment – 7%
- *Travels & events – 6%
Increase Relationship Managers Productivity:
- Strengthen foundation – Cloud migration, Internal APIs
- Maximize efficiency – Rationalise IT footprint, Cloud-native applications
- Expand value – External APIs, Artificial intelligence / Machine learning, Automating tasks
Digital Workstation for Relationship Managers:
- Access to market – Real-time market data, events, market research, visualisation tools, capital market scanner
- Access to client servicing teams – Client management, financial planning tools, client financials, client reporting
- Access to operations team – Order entry, account management, client communication, access to ERP system (Enterprise resource planning)
- Access to business team (cross-selling) – Banking, cards, insurance, credit advisor
- Access for administrative tasks – Training, procurement, product information, service information, document repository
- Access to 3rd-party specialists – Tax planning, concierge services, account aggregation, legal advice, event planning
6) Wealth Management Industry
Wealth Management Insights – Revenue, Profit, Cost, Productivity:
- Expect Wealth Management firm cost-to-income ratio to average around 65% to 70%
- With rise of operational costs, customer churn & declining profits keeping Wealth Management executives up at night, developing strategic plans to maximize productivity, improve client engagement and experience, and unlock value streams is now essential to sustain long-term business growth.
- 1 in 3 Wealth Management executives ranked their firm’s end-to-end digital maturity as high.
- 45% of Wealth Management executives reported cost per relationship manager is rising, driven primarily by wealth value chain inefficiencies.
- 8% of surveyed Relationship Managers reported managing client expectations of 24/7 availability is challenging.
Wealth Management Executives Top Priorities:
- Improve client experience – 76%
- Investing to support changing client demands – 68%
- Upgrading technology infrastructure – 66%
- Partnerships with WealthTechs and ecosystem players – 48%
- Expand services to the affluent segment – 40%
- Modernization through mutualization (3rd party solutions) – 36%
Wealth Management Executives Technology Plan:
- Firm is pursuing cloud migration – 88%
- Expanding internal application programming interfaces (APIs) – 63%
- Early stages of building cloud-native applications – 47%
- Pursuing digital transformation – 45%
- No specific plan – 20%
Wealth Management Executives on Artificial Intelligence:
- Early planning stages – 56%
- No plans – 22%
Wealth Management Executives Supporting ESG investments:
- Launching ESG-related products & offerings – 69%
- ESG factors embedded across the investment portfolio – 61%
- Educating employees on ESG – 60%
- Thought leadership on ESG – 57%
- Collecting & analyzing ESG data – 52%
- Making ESG-linked assets traceable – 31%
Wealth Management Platform Layers:
- Distribution – Branch network, Advisor desktop (video), Website, Mobile app, Call centres, Rabo-advisory
- Core services – Financial planning, Portfolio management, Portfolio monitoring, Banking services (deposits, lending)
- Back-office – Reporting, Workflow management, Portfolio construction (Analytics & modelling), Compliance, Portfolio rebalancing
- Business process – Onboarding, Data management, Order management, Reconciliation, Custodial services, Settlement, Other asset services
- CRM & customer analytics
7) Affluent Clients ($250k to $1 million)
Affluent Clients on Wealth & Investment Services:
- Affluent clients look to relationship managers for investment advice – 57%
- Wealth Management firms do not offer them value-added services – 46%
- Affluent clients expect value-added services, including tax planning, mortgage management, portfolio management, and other advisory services – Around 33%
- For investment advice, rely on independent wealth advisors – 43%
- Manage their own investments via do-it-yourself approaches or tools – 20%
Affluent Clients in Asia-Pacific:
- Rely on independent wealth managers – 58%
- Manage own wealth – 25%
- Retail Banks – 10%
- Traditional wealth management firms – 5%
Affluent Clients Insights:
- Like wealth management services from their retail banks. – 71%
- Wealth Management firms do not offer them value-added services – 46%
- Investments do not align with their life goals.- 43%
- Unaware of investment-related risks and their investment strategies are not aligned with their life goals – 42%
- Robo-advisory service does not effectively answer their questions – Around 33%
- Satisfied with their current wealth management service provider – 18%
- Lack the knowledge and support to make investment decisions during times of volatility – 8%
- Pure wealth management firms support establishing a dedicated affluent segment platform – 7%
8) Affluent Clients Growing Segment ($250k to $1 million)
Targeting at Growing Segment – Affluent clients:
- Retail bank business line
- Independent wealth advisors or registered investment advisors
Affluent Clients Services:
- Financial planning
- Model selection
- Client onboarding
- Asset allocation
- Portfolio construction
- Custody & clearing
- Trading
- Reporting
Capgemini World Wealth Report 2023
The World Wealth Report 2023 market-sizing model covers 71 countries. The Capgemini 2023 Global HNW Insights Survey questioned 3,171 HNWIs across 23 major wealth markets in North America, Latin America, Europe, and Asia-Pacific. The 2023 Wealth Management Executive Survey covers more than 95 responses across 14 markets, with representation from pure Wealth Management firms, universal banks, independent broker/dealer firms, and family offices The 2023 Relationship Manager Survey covers more than 800 responses across 9 markets.
High Net-Worth Individual with investable assets of >USD 1 million, excluding primary residence, collectibles, consumables, consumer durables
Affluent: Wealth band with investable assets typically between USD 250,000 and USD 1 million
About Capgemini
Capgemini is a global leader in partnering with companies to transform and manage their business by harnessing the power of technology. The Group is guided everyday by its purpose of unleashing human energy through technology for an inclusive and sustainable future. It is a responsible and diverse organization of nearly 360,000 team members in more than 50 countries. With its strong 55-year heritage and deep industry expertise, Capgemini is trusted by its clients to address the entire breadth of their business needs, from strategy and design to operations, fueled by the fast evolving and innovative world of cloud, data, AI, connectivity, software, digital engineering and platforms. The Group reported in 2022 global revenues of €22 billion.
About the Capgemini Research Institute
The Capgemini Research Institute is Capgemini’s in-house think-tank on all things digital and their impact across industries. It is the publisher of Capgemini’s flagship World Report Series for over 25 years with dedicated focus for Financial Services and publishes thought leadership on digitalization, innovation, technology and business trends that affect banks, wealth management firms, and insurers across the globe. Independent agency rated a recent World Retail Banking Report, published by the Institute, as one of the top 10 publications among consultancy and technology firms globally.
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