High-net-worth market hits 4.8% in 2023

Thanks to an improving equity market and better macroeconomic environment.

The region’s high-net-worth market has increased significantly, with individuals and overall wealth climbing 4.8% and 4.1%, respectively.

Global high-net-worth individuals (HNWIs) grew 5.1% whilst overall wealth climbed 4.7% on the back of a resurging equity market and tempered macroeconomic environment.

The wealthy are rebalancing their portfolios to meet financial goals, according to Capgemini’s World Report Series 2024.

Cash holdings normalised globally to 25% in January, slimming from decades of highs. Whilst allocations to alternative assets increased to 15%, this signalled more investors eager to diversify into high-return asset classes.

Yet, wealth management firms face hurdles to turn into profit amidst ongoing geopolitical conflicts, election worries, recession fears, changing interest rates, and volatile stock market trading.

To sustain growth, firms are focusing on winning ultra-wealthy investors by leveraging behavioural finance techniques and AI integration.

As the population of ultra-high-net-worth individuals (UHNWIs) grows, investment styles are shifting towards long-term wealth growth, emphasising value-added services. 

Family offices excel in non-financial services, increasing competition for UHNWI investments.

To adapt, Capgemini said wealth management firms should provide a comprehensive suite of products and services, integrating internal teams and third-party partners for an efficient ecosystem. Digital channels are becoming increasingly important, and collaboration with family offices can unlock new revenue streams through tailored services.