Global wealth report warns Brexit and US election are ‘wild cards’ to economy

The BCG survey says Asia-Pacific wealth could overtake North America by 2020

Global wealth, report, Europe, Ireland, US, election, Asia, Japan, BCG Global Wealth

In this file photo, freshly-cut stacks of $100 bills make their way down the line at the Bureau of Engraving and Printing Western Currency Facility in Fort Worth, Texas | Image: LM Otero / AP/Press Association Images

A new wealth report has warned that the US presidential election is “a wild card” to the global economy.

The BCG Global Wealth survey for 2016 says Asia is likely to see the highest growth rate in terms of wealth for this year.

It says the Asia-Pacific region, combined with Japan, is projected to overtake North America in total private wealth soon after 2020.

It is also expected to surpass Western Europe as the second wealthiest region as early as next year.

Asia-Pacific was the only region to post double-digit wealth growth last year.

The 13% expansion was driven more by rising household income – rather than by asset performance – as the entire region experienced high volatility in financial markets.

But it adds that "China remained the principal growth motor in the region".

The index also singles out the upcoming US presidential election, saying it "is still a wild card with regard to its effect on financial markets".

Closer to home, it says Western Europe had private wealth of 4% last year, down from 6% a year earlier.

It also says that while regional wealth growth is expected to continue at similar rates, this could be "held back by the low-interest-rate environment and the potential exit of Great Britain from the European Union".

Source: BCG

"Speed bump" of growth in 2015

Meanwhile, private wealth globally is expected to rise at an annual rate of 6% over the next five years to reach US$234tn (€205tn) in 2020.

The number of millionaire households grew by 6% world-wide last year, with several countries – particularly China and India – seeing large increases.

But the report says there was "no significant shifts in millionaire density compared with 2014", with Lichtenstein and Switzerland keeping the highest concentrations.

Generally, the index says the growth of global private wealth hit "a speed bump" in 2015, especially in the developed markets.

It says all regions other than Japan experienced a slowdown relative to last year.

"This development, combined with the ongoing decline of revenue and profit margins - all amid shifting client needs in both traditional and non-traditional segments - is forcing wealth managers to re-evaluate their strategies", it says.

While the report also found that women held an estimated 30% of global private wealth, with the share slightly higher in developed markets than in emerging ones.