More than a million people now ‘very wealthy’ after stock market boom
At least one million people entered the global ranks of the extremely wealthy over the course of 2016 thanks to booming stock markets. The boom means that the number of individuals with free assets of more than $1m or £750,000 now stands at an all time high of 16.5 million.
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Stock Market Boom Sees More “HNWI”
The research comes courtesy of Capgemini, a business consultancy firm, who found that the high net worth individuals collectively held $63.5tn. The parameters to qualify as a high net worth individual (HNWI) are fairly simple, a person’s assets must be worth $1 million or more, although the assets must not include their primary residence or its contents.
Over 2016, 1.1 million people’s fortunes grew enough to see them enter the HNWI bracket. The rise in wealth has been put down to shares in both US and European markets performing especially well. The report also highlighted the fact that individuals who are already rich are getting richer more quickly than the wider population. This comes as no surprise considering that HNWIs have access to financial advice. In fact, during 2016 HNWIs earned returns of 24.3% on average in portfolios overseen by wealth managers.
Sharp Rise In Wealth
The rate of people becoming ultra high net worth individuals was also up on previous years. 2016 saw an 8.3% rise in individual’s assets reaching more than $30m. That’s more than double the increase seen in 2015. The report showed that there are now more than 157,000 Ultra-HNWI throughout the world, with the individuals now holding $22tn in assets.
The rapid rise is down to an economic upturn in Latin America. The region accounts for more ultra-HNWI than anywhere else, so its vibrant growth saw ultra-HNWI increase their wealth by a huge 9.5% over the course of 2016. To put that into context, that figure stood at 2.5% in 2015.
UK Drops Out Of Top 5
The news was less healthy on the domestic front, with the UK dropping out of the top five countries in which HNWI live. Overtaken by France, the UK now sits in sixth place and is unlikely to recover anytime soon. Concerns surrounding the drop in value of sterling in the wake of Brexit, along with the fact that France enjoyed healthy share price growth, meant that an increasing number of HNWIs decided to up sticks.