The Wealth-X World Ultra Wealth Report 2021 provides an in-depth analysis of the ultra-high net worth (UHNW) population — a group of individuals with $30m+ net worth. As experts in the affluent market, Relevance stays at the forefront of wealth data to gain further insight into these UHNWIs; working to understand where they live, their age, where they studied, their industry, roles, hobbies, the people and brands who influence them, media and events attended, the content they consume, their personality traits, buying mindset and purchase influences, and online habits. Below, discover our top ten takeaways from the latest Wealth-X report.
What we learnt from the 2021 ultra-wealth report
- The global UHNW population grew 1.7% in 2020 to a total of 295,450 ultra-wealthy individuals. This was despite the disruption of the pandemic, volatile capital markets and the deepest contraction in world economic output for a generation. The net worth of the entire UHNWI population increased by 2% in 2020, taking its total to $35.5 trillion.
- Ultra-wealth may have grown on a global level, but performance varied significantly between regions.
These 10 countries are home to three-quarters of the global UHNW population. Despite sharply contrasting performances across the leading wealth markets in 2020, this top 10 ranking remains the same as the previous year.
For the second year in a row, the regions which performed the best were North America and Asia, both recording solid growth of their UHNW populations and collective net worth. The other five regions all saw declines. While ultra-wealth in Africa didn’t fall by much, the Pacific, Europe and the Middle East all registered noticeable drops that largely wiped out the previous year’s gains. Latin America and the Caribbean performed worst of all the regions, with the UHNW population and collective net worth there falling by almost a quarter.
This difference in performance was due to differing public health, economic disruption, policy intervention, asset values and vaccine progress around the world.
- In Europe, UHNW wealth was damaged significantly by virus spread, lockdowns and Brexit in 2020, with the number of UHNWIs in this continent declining by 4.9% to 74,030. The region’s share of the global ultra-wealthy population fell to 25%. Collective net worth dropped by 4% to $8.9trn, returning close to its 2017 level.
- The Wealth X Report 2021 states that the country with the most UHNWIs is the US, followed by China, Japan, Germany, Canada, France, Hong Kong, United Kingdom, Switzerland, and India.
- The wealth report states that the city with the most UHNWIs is New York, followed by Hong Kong, Tokyo, Los Angeles, Chicago, San Francisco, Paris, Washington DC, Osaka, and Dallas.
Notably, Paris is now the leading European UHNW city, with London having fallen out of the top rankings. The pandemic dealt a larger blow to the economy and public health of the UK than to those of many other countries.
- Looking more broadly than just those UHNWs with $30+million net worth, the Wealth-X report broke down the numbers and finances of HNWs, VHNWs and UHNWs. HNWs are defined as having $1-$5million and VHNWs have $5-$30million.
In 2020, there were 25,814,770 HNWIs, 2,719,730 VHNWIs and 295,450 UHNWIs in the world. Global HNWIs had a total wealth of $105,222nb, while VHNWIs had 27,064bn and UHNWIs had 35,459bn.
- UHNW wealth that was related to business and consumer services grew by 0.8% in 2020, while fortunes attached to finance, and hospitality and entertainment fell. The fortunes of the under-50s, the youngest and smallest UHNW subsection, grew the most in 2020. Technology accounts for a large proportion of wealth in this group, and so the pandemic saw the fortunes of many of these individuals rocket as digitalisation became essential.
- The Wealth X Report 2021 states that UHNW individuals with inherited fortunes tend to have a greater interest in philanthropy and art. Meanwhile, technology only ranks in the top five interests among the self-made. All three wealth source groupings – inherited, inherited/self-made, and self-made – have an interest in sports, philanthropy and the outdoors in common.
- Self-made wealth continues to increase. A slow but noticeable increase in self-made UHNWs has occurred over the past five years, with this group accounting for 72% of the global ultra-wealthy population in 2020, having grown six percentage points since 2016.
This is due to changes in the global economic landscape, including the substantial rise of enterprise opportunities in emerging markets and technological advances, that have enabled new wealth to be created relatively quickly.
At the same time, those whose wealth is purely inherited now account for just 7% of UHNW individuals – a small decline from 2016 levels.
- In contrast to the general population, where the disruptive nature of COVID-19 in terms of employment and income was felt more brutally by women, there was a negligible difference in UHNW wealth impact by gender in 2020.
However, it is worth noting that women still make up just 10% of the UHNW population. While the proportion of high-wealth women has risen over the last decade, thanks to shifting cultural attitudes, a larger proportion of female entrepreneurs, and wealth transfers between generations, the UHNW community is still heavily dominated by males.
Since wealth generally takes decades to create or be passed to the next generation, equalisation between the genders of UHNWIs is likely to take a very long time, however gradual change will continue to slowly and steadily make an impact.
For more insights into UHNWIs, contact the specialists at Relevance today.