David Prosser: The world's rich just got a little bit poorer
Thursday 25 June 2009
Outlook There are some striking numbers in the annual survey of the world's wealthiest people, published by Merrill Lynch and Cap Gemini yesterday – not least that individuals with a high net worth lost more than a fifth of their wealth last year. However, what is also interesting is that the balance of global economic power is not changing as quickly as one might expect.
It is true, for example, that China's high-net-worth population has now overtaken that of Britain. But equally, the US, Japan and Germany still account for 54 per cent of the world's high-net-worth folk, which is actually a small increase on 2008.
Indeed, all four of the BRIC nations shared in the economic pain of last year, with the wealthy in Russia and India, in particular, suffering disproportionate losses. China moved up the league only because it lost less wealth than the UK, while Brazil suffered too, although it has also made gains.
Naturally, the wealthy want someone to blame for their woes, which explains another stand-out statistic in the report. Some 46 per cent of the rich say they have lost confidence in the people managing their wealth, while 25 per cent add that they have taken at least some of their money away from whoever was previously in charge of looking after it. That's an ongoing headache with which the world's largest fund managers must now grapple.
What is clear is that investment managers will not, for the foreseeable future at least, be given carte blanche to invest their clients' money at will. You can expect to see financial portfolios being moved about with much greater frequency, a new focus on the quality of risk management practices, and some searching questions about fees.
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