The effects of the war in Ukraine and the macroeconomic uncertainty resulting from the escalation of the conflict are already being felt in the pockets of those who have the most. In 2022, for the first time in a decade, the global number of millionaires fell by 3.3% to 21.7 million and their respective fortunes fell by 3.6%, driven by the devaluation of stocks on stock exchanges around the world, in total $83 billion (about $77.8 billion, at the current exchange rate) at the end of last year, according to Capgemini’s World Wealth Report 2023, which surveyed 3,171 high net worth individuals in 23 major markets.
While still the region where wealth is most concentrated, with a current share of $25.6 billion, North America was the region with the largest drop (-7.6%). Along the same lines, Europe also experienced a 3.2% decline to $24.7 billion, and in the Asia-Pacific region, losses reached 2.7%, with this area’s assets at $18.2 billion.
On the other hand, Africa, Latin America and the Middle East were more resilient in 2022, with growth rates, “due to the strong performance in the oil and gas sector,” the report states. Latin America grew the most (2.1% to $9.2 billion), followed by Africa (1.6% to $1.9 billion) and the Middle East (1.5% to $1.9 billion ).
ESG investments
While only 23% of millionaires will have made a profit from environmental, social and corporate governance (ESG) assets by 2022, interest in these types of products seems to continue. Of the total number of respondents to this year’s World Wealth Report, 41% said the rating impact of sustainable investments is one of their top priorities, and 63% said they had requested ESG ratings for their assets.
However, the study concluded that “few asset managers see analysis of this type of data as their top priorities (52%) and traceability (31%)”. Managers themselves even underlined the need for more data to understand the impact of this approach, with nearly one in two saying they need more information on the topic to effectively engage with customers.
Digitization is key
“The lack of digital tools currently being felt prevents managers from providing adequate financial advice and providing a value-added customer experience,” warns Capgemini, adding that investor outcomes are being impacted.
The consultant inquired about the topic and only one in three executives rated their company’s end-to-end digital maturity as high. In addition, it was found that inefficiencies in the value chain also increase the cost per customer manager and that the time these professionals spend on non-essential activities costs time interacting with customers. As a result, 31% of clients said they are likely to switch asset managers in the next 12 months.
Nilesh Vaidya, global head of banking and capital markets at Capgemini, says that “to stay relevant, the industry must amplify its value, empower client managers and unlock new growth opportunities.”
betting on the rich
Expanding the pool of potential asset management clients is imperative if the industry is to grow in the long run – and the wealthy (those with invested assets typically between $250,000 and $1 million), who continue to grow, should take the gamble. are, the report says.
It is in North America (46%) and Asia-Pacific (32%) that there are more wealthy people, both in terms of wealth and number of people. In total, this group holds USD 27 billion in assets (nearly 32% of the total wealth of millionaires), but according to Capgemini, 34% of asset managers do not explore this segment.
More than 70% of high net worth respondents said they were particularly interested in wealth management advisory services from their banks over the next 12 months.
Mariana Coelho Dias is a journalist at DInheiro Vivo
Source: DN
