Around 60% of the total millionaires in the world originate from the US, Japan, Germany and China, with Australia boasting the ninth highest number of millionaires in the world at 219,000.
This is according to the World Wealth Report 2014 conducted in conjunction by global consulting firm Capgemini, RBC Wealth Management and Scorpio Partnership. Together, they queried more than 4,500 high net-worth individuals (HNWIs) – assessed as people who had more than $US1 million to invest – across 23 major wealth markets in North America, Latin America, Europe, Asia Pacific, the Middle East, and Africa.
The number of millionaires in Australia increased by 5.8% from 207,000 in 2012 to 219,000 in 2013. According to the report, the confidence of Australian millionaires in their ability to generate wealth (81.9%) in the coming year was slightly higher than that for HNWIs in the rest of the world (79.9%).
“This positive outlook could be partly a function of Australia’s positive GDP growth rate in 2012 of 3.6% which was the highest of Industrialised Asia and greater than global GDP rate of 2.2%,” the report said.
Interestingly, Australian millionaires held around 40.6% of their financial assets in real estate – further demonstrating Australians’ love affair with property – close to double the rest of the world average and far higher than India’s 26.5%, which is the second-highest allocation in the region.
Given their large investment in real estate, Australian millionaires invested less in every other asset category, compared to the rest of the world averages. For instance, cash and deposit products accounted for 19.8% of their portfolios compared to 24.5% in the rest of the world.
Interestingly, the report also contained findings on the millionaires’ penchant for jewellery – revealing that Australians were the most enthusiastic investors in art, with an allocation of 20.8%. Other Australian “investments of passion” included jewellery, gems and watches (29.0%), luxury collectibles (19.3%) and sports investments (4.7%).
When it came to social conscience, around 47.4% of them said it was important to give time, money, and/or expertise with the goal of generating social impact – well below the global average of 60.5% and countries such as India (90.5%), China (89.4%), Indonesia (89.2%), and Hong Kong (82.1%).
Other findings from the survey were:
- Australia is the only country in Asia Pacific where a higher number of millionaires focused on wealth growth (34.1%) rather than wealth preservation (32.7%)
- Australian millionaires considered their needs to be more straightforward, encompassing the management of cash, credit and growing investments (48.3%), and this sentiment was particularly strong in the higher age and wealth bands
- more than half the number of millionaires in Australia who are 50 years or older, and also those with over $10 million, described their needs as being straightforward, and
- a higher proportion of female millionaires in Australia preferred advice on personal wealth (46.3%) than their male counterparts (35.5%).
Articled provided by Taxpayers Australia Limited