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Research: Millionaires Ride Markets to More Wealth

  • Reuters

People pass the statue of the bull near Wall Street in New York, undated file photo.

People pass the statue of the bull near Wall Street in New York, undated file photo.

Global wealth grew faster in 2012 than in the previous two years, boosting the number of millionaires and improving the outlook of the wealthy, according to new studies.

Private investable assets increased 7.8 percent last year, compared with being up 3.6 percent in 2011 and 7.3 percent in 2010, according to the "Global Wealth 2013" report released Thursday by the Boston Consulting Group (BCG). The study calculated the global number of millionaires at 13.8 million, which accounts for 0.9 percent of all households. BCG calculates millionaires by their investable assets excluding a primary residence or business.

One major driving force of the uptick, the rising stock market, has also buoyed the Spectrem Millionaire Investor Confidence Index which measures the outlook of wealthy investors. The latest reading Wednesday was at a two-and-a-half-year high. Spectrem measures millionaires differently than BCG, assessing total net worth minus a primary residence.

Still, this brings the numbers almost back to where they were in 2007, before the financial crisis, said George Walper, president of the Spectrem Group, a consulting firm based in Chicago.

"Markets being up has been a great boost morale-wise," he says. "That being said, this population is still really concerned about the recovery being long-term, and about unemployment rates. They know that a great deal of the recovery has been supported by the government."

U.S. still leads

Among millionaire households, as BCG defines them, the U.S. has the most with 5.9 million. Japan is next on the list with 1.5 million, followed by China with 1.3 million, but BCG forecasts that they will switch places by 2017.

While it will be some time before those countries unseat the United States, BCG predicts the growth rate in U.S. millionaires will likely not continue to be so heated, slowing to 2.3 percent.

Qatar, notably, has the highest density of millionaires — 143 out of every 1,000 households.

Assets under management

Wealth managers have profited from the growth of global wealth by increasing their assets under management by 13 percent globally in 2012, according to BCG. In North America, specifically, assets under management were up 10 percent, and American banks had a track record for return on assets of 93 basis points.

While this might sound promising, other studies, like Fidelity's annual Millionaire Outlook study in 2012, show that investors are skeptical about the value of the financial advice they get. Some 43 percent said they did not receive sufficient value from their adviser.