WEALTH: How the World's High-Net-Worth Grow, Sustain, and Manage Their Fortunes

Share Article

Based on more than a decade of research, Merrill Lynch and Capgemini offer a new book to give insights into the asset management strategies of the wealthy - which can assist investors in achieving results, regardless of current net-worth.

Over the past decade, worldwide wealth management trends have shifted dramatically. As of last year, there were 9.5 millionaires controlling $37 trillion in assets worldwide. We are witnessing a greater concentration and consolidation of wealth but also significant shifts in investment habits. But what makes the HNWI different from the average investor?

In WEALTH: How the World's High-Net-Worth Grow, Sustain, and Manage Their Fortunes (Wiley; April 2008; Cloth; $29.95) Merrill Lynch and Capgemini take readers into the trend-setting and innovative world of the wealthy, and the complexity and competitiveness of the global wealth management market.

WEALTH is a ten year compilation of collective insights and a look forward into the world of the wealthy and the trends that drive investment patterns and behavior. Wealth is a complete guide to holistic wealth management, covering topics and trends that include:

  • Alternative investments: From hedge funds and commodities to real estate and luxury goods. HNWIs have boosted their portfolio share of these investments to gain superior returns to traditional stock and bond markets;
  • Giving while living: HNWIs donated $285 billion dollars to charity in 2007, but are now increasingly involved with philanthropic interests and demanding accountability from grant recipients;
  • Emerging markets: From China and India to Latin America, HNWIs are investing beyond North America and Europe and helping to drive one of the greatest economic trends: globalization;
  • Transferring wealth to the next generation: Children of today's HNWIs are a Google search away from finding out what their parents are worth. No longer sheltered from this information, HNWI's now must begin educating children about the impact of wealth on their lives;
  • Technology and the informed investor: The use of technology and the internet to provide enhanced advisory services has transformed the quality and quantity of information available to private banking investors, making them more accessible to wealth managers and more demanding and sophisticated customers than their predecessors.

Based on more than a decade of research, Merrill Lynch and Capgemini offer insights into the asset management strategies of the wealthy - which can assist investors in achieving results, regardless of current net-worth.

About the Authors

Merrill Lynch is one of the world's leading wealth management, capital markets and advisory companies, with offices in 40 countries and territories and total client assets of approximately $1.6 trillion. As an investment bank, it is a leading global trader and underwriter of securities and derivatives across a broad range of asset classes and serves as a strategic advisor to corporations, governments, institutions and individuals worldwide. Merrill Lynch owns approximately half of BlackRock, one of the world's largest publicly traded investment management companies, with more than $1 trillion in assets under management. Merrill Lynch is the co-author of the annual World Wealth Report. For more information on Merrill Lynch, please visit http://www.ml.com.

Capgemini, one of the world's foremost providers of consulting, technology and outsourcing services, enables its clients to transform and perform through technologies. Capgemini provides its clients with insights and capabilities that boost their freedom to achieve superior results through a unique way of working - the Collaborative Business Experience - and through a global delivery model called Rightshore®, which aims to offer the right resources in the right location at competitive cost. Present in 36 countries, Capgemini reported 2007 global revenues of EUR 8.7 billion and employs over 83,000 people worldwide. Capgemini's wealth management practice helps clients develop innovative growth strategies and successfully implement advisor and customer relationship management solutions. Capgemini is the co-author of the annual World Wealth Report. For more information, please visit http://www.capgemini.com.

Since 1997, Capgemini and Merrill Lynch have published the global industry benchmark on High Net Worth Individuals (HNWIs), the World Wealth Report. The 2008 edition will be launching early summer. For more information visit http://www.capgemini.com/worldwealthreport.

Founded in 1807, John Wiley & Sons, Inc., provides must-have content and services to customers worldwide. Wiley is a global knowledge company with a diverse portfolio of technology, business, consumer and how-to brands, computer-based learning tools, Web-based products and Internet e-services. Wiley's best-selling brands and imprints include Jossey-Bass, For Dummies, Betty Crocker, The Culinary Institute of America (CIA), Bible, Cliffs Notes, Frommer's, Unofficial Guides, Visual, Weight Watchers, Ernst & Young, JK Lasser and Webster's New World. Wiley has thousands of active titles in 39 languages and also owns the websites http://www.cliffsnotes.com, http://www.dummies.com and http://www.frommers.com.

Q & A from Wealth:
How the World's High-Net-Worth Grow, Sustain, and Manage Their Fortunes

Q: How are HNWIs (high-net-worth individuals) and ultra-HNWIs defined?
A: HNWIs are defined as individuals with US$1 million in investible assets, excluding their primary residence. Ultra-HNWIs have financial assets in excess of US$30 million.

Q: What can the average investor learn from HNWI's and ultra-HNWI's?
A: "By watching how they put their money to use, one gets a valuable insight and feeling for what investments will become popular and more widely available in the future. A case in point is how hedge funds and private equity investments have steadily moved downstream from HNWIs into the mainstream of strategies open to the mass affluent. Such forward-looking insight tends to be particularly valuable since HNW investment strategies tend to outperform those routinely employed by other categories of investors."

Q: How has philanthropy grown in importance for HNWIs?
A: "We identify and explore two major trends on the philanthropic scene: "venture philanthropy" and "giving while living." Today's millionaires--many with strong entrepreneurial bents--are working to change the rules of philanthropy by bringing corporate world discipline to philanthropic pursuits: they set specific goals and timelines, track and measure results, tie future funding to meeting certain milestones and, whenever possible, aim for profitability and self-sustainability. Today's entrepreneurially inclined philanthropists like to encourage entrepreneurship in their grant recipients, not handouts."

Q: What trends have been driven by HNWIs and ultra-HNWIs?
A: "Wealthy and ultra-wealthy investors' perennially urgent demand for convenient and comprehensive access to markets and information has given rise to a dazzlingly broad range of bespoke products and asset classes. The most avid consumers of these new asset classes consist primarily of a new client class we have labelled "active performance-driven investors." While once upon a time the average wealthy investor might have sought out a private banker for his or her high-end investment advice--probably the same private banking house that served his or her parents or grandparents--today's more versatile, knowledgeable and empowered HNWIs are inclined to take a broader view of their entire financial picture. This broader view has in turn ushered in an era of financial service in which a comparatively small number of firms with a global footprint are prepared to combine the intimacy of a financial boutique with the intellectual capital of a financial powerhouse."

Q: What direction is future wealth management headed?
A: "We predict that the same drivers at work today--demographics, globalization and technology--will continue to propel and shape wealth management for decades to come. And they will do so in ways not necessarily obvious. For instance, the aging of HNWIs is generally expected to mean a wave of retirement and the need to implement "decumulation" or distribution strategies to manage cash flow over a thirty-year span of leisure."

For more information, please contact Deborah Guichelaar at 416.236.4433 ext. 53013 or dguichel@wiley.com

###

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Deborah Guichelaar

416-236-4433-53013
Email >