Ranks of the rich dwindle amid turmoil

THE GLOBAL financial crisis has seen the ranks of the world&rsquo;s wealthiest people shrink, according to the World Wealth Report released by Merrill Lynch and Capgemini yesterday.<br /><br />The number of high net worth individuals (HNWIs) &ndash; those with at least $1m (&pound;608,908) in assets excluding primary residences &ndash; fell 14.9 per cent to 8.6m in 2008 compared to the previous year, while their total wealth slumped 19.5 per cent to $32.8 trillion.<br /><br />Ultra-HNWIs &ndash; those with at least $30m in assets excluding primary residences &ndash; lost 23.9 per cent of their wealth and decreased in numbers by 24.6 per cent.<br /><br />But the wealth of the world&rsquo;s richest is forecast to rise again as the global economy recovers.<br /><br />The report predicted that global HNWI wealth would increase to $48.5 trillion by 2013, growing at a rate of 8.1 per cent per year. <br /><br />The concentration of HNWIs by geographic area also changed, with China overtaking the UK to become the fourth-ranked nation by number of wealthy people.<br /><br />The US, Japan and Germany, which occupy the top three spots, together accounted for 54 per cent of the global HNWI population, up slightly from 53.3 per cent in 2007.<br /><br />The report also identified an exodus into safer investments such as fixed income, amid a loss of trust in markets, regulators and financial advisors.<br /><br />HNWIs embarked on a flight to safety towards treasuries and other fixed income products, as global equity markets plummeted.<br /><br />By the end of 2008, the proportion of total global HNWI financial assets made up by equities had fallen from 33 per cent to 25 per cent, while fixed income accounted for 29 per cent, up from 27 per cent last year.<br /><br />The report said HNWIs had started to look for the &ldquo;return of their investment, not on their investment&rdquo;.