[Peace-discuss] What we're fighting for

[C. G. Estabrook]

	World's richest got even richer last year: report
	Thu Sep 4, 2008 6:07pm EDT
	By Joseph A. Giannone

NEW YORK (Reuters) - The old saying holds true: The rich do get richer.

Even as world financial markets broke down last year, personal wealth around the 
world grew 5 percent to $109.5 trillion, according to a global wealth report 
released on Thursday by Boston Consulting Group.

It was the sixth consecutive year of expanding wealth. The fastest growth was 
among households in developing regions, such as China and the Gulf States and 
among families who were already rich.

That wealth also is increasingly concentrated among the richest.

The top 1 percent of all households owned 35 percent of the world's wealth last 
year. Meanwhile, the top 0.001 percent, ultra-rich households holding at least 
$5 million in assets, commanded $21 trillion -- a fifth of the world's wealth.

The planet also continues to mint new millionaires rapidly. The biggest jumps in 
2007 came from emerging countries in Asia and Latin America. Overall, the number 
of millionaire households grew 11 percent to 10.7 million last year.

BCG notes that, while the rich are still rich, they have been making some 
adjustments as a result of the financial crisis.

This year, assets are being shifted to more conservative investments, more money 
is being kept onshore in home markets and some individuals have curtailed new 
investment.

Yet BCG cautioned the outlook for wealth markets and the banks who serve them, 
is dimmed by the current financial crisis.

North American personal wealth growth slowed to 3.8 percent last year, compared 
with 9 percent in 2006, reflecting the the mortgage crisis and the onset of the 
credit crunch last summer.

"The financial crisis continue to cast a pall over established wealth markets," 
said Victor Aerni, a Zurich based partner who coauthored the report.

BCG, which advises banks and wealth managers, forecasts personal wealth will 
continue growing, but at a slower pace. This year, with Wall Street suffering 
through one of its worst slumps in decades, growth in assets is expected to rise 
less than 1 percent.

Things will improve over the next five years, BCG said, with personal wealth 
growing more than 3 percent annually -- well off the 8.5 percent set between 
2002 and 2007.

Wealth is growing at much faster rates among the rest of the world. Households 
in Asia, the Pacific Rim excluding Japan and Latin America saw the greatest 
growth, with wealth rising 14 percent. That growth was fueled by manufacturing 
in Asia and commodities in Latin America and the Middle East, as well as more 
currency and political stability.

BCG observed that banks, brokerages and money managers will have little choice, 
but to expand their presence in these fast growing centers. Dubai and Singapore, 
the firm said, are becoming regional private banking centers offering greater 
competition to traditional havens such as Switzerland.

(Editing by Andre Grenon)

© Thomson Reuters 2008.