The number of millionaires and the total amount of their wealth continued to grow last year, but at a much slower pace than the previous year, according to Capgemini and RBC Wealth Management.
The population of people with at least $1 million in assets grew by 6.7 percent and their total wealth expanded by 7.2 percent, roughly half of the rate of the previous year, and the second slowest rate of the last five years, according to the 2015 World Wealth Report released Wednesday.
Relitavely strong economic and equity market performance helped create 920,000 new millionaires globally in 2014, for a world total of 14.6 million with a total wealth of $56.4 trillion.
The rate of growth has slowed because 2013 was such an outstanding year for equities, particularly in the three large markets of the United States, Germany and Japan, all of which slowed last year, according to Bill Sullivan, head of Global Financial Services Market Intelligence for Capgemini Financial Services.
A growth rate of about 7.7 percent in total wealth is predicted through 2017. RBC is a wealth management firm and Capgemini is a business consulting and technology firm.
The United States is still the leader in the number of millionaires, with 4,351,000, followed by Japan with 2,452,000. However, the entire Asia-Pacific area expanded its millionaire population the fastest, the report says.
As in previous years, most of the growth in the world's millionaire population happened in just a handful of markets. The U.S., Japan, Germany and China accounted for two-thirds of the growth in 2014, with 610,000 millionaires added in these top markets.
Wealth management firms are facing a challenge to meet the needs of the high-net-worth population, particularly those under 45 years of age, according to the report. Wealth managers are overestimating the degree to which they understand the wealth needs of younger high-net-worth individuals, with a 15-percentage-point gap between how well younger millionaires believe their needs are understood by their wealth managers and the perceptions of wealth managers themselves.
The most important finding from the report is that there is a continued need for wealth managers to evolve to holistic planning, said Sullivan. Advisors also need to realize there is a role for automated wealth services (robo advisors) to supplement the added value that wealth managers can provide, he said.
Pressure from ongoing industry issues, such as regulation, rising costs and new entrants to the market, is significantly changing the traditional wealth manager role, the two firms said.
“A number of emerging factors are impacting the wealth manager role and now is the time to address these converging and accelerating market dynamics,” said Andrew Lees, global sales officer for Capgemini Global Financial Services.
The report included responses from 5,100 millionaires from 23 countries and 800 wealth managers.
