Two years ago, tough economic conditions and geopolitics weakened financial markets, but 2023’s rebound has helped global net wealth rise, according to Boston Consulting Group.
While the global net wealth figure including financial wealth, liabilities, and real assets gained 4.3% to $477 trillion, the financial wealth subset was up almost 7% with more than half of the new financial wealth coming from North America as equity markets led the charge.
Financial wealth globally increased to $275 trillion in 2023 having declined 4% in 2022, and while other regions were less bountiful than North America, especially as wealth creation in China slowed, there is anticipation at BCG of strong gains in the next five years.
The firm’s report estimates that $92 trillion of financial wealth will be created between now and 2028 with Asia Pacific accounting for 30% of new wealth and India also expected to continue its current run of wealth creation over the period.
For the wealth management industry, the rise in wealth provides opportunity, for those that seize it well.
“Wealth creation resumed in 2023—but even so, wealth mangers cannot afford to stand still,” said Michael Kahlich, a managing director and partner at BCG and a coauthor of the report. “To capitalize on growing global wealth, industry players, among others, will need to set a clear digital transformation strategy and leverage GenAI to manage costs and improve client experience.”
The use of artificial intelligence in the industry is already underway of course, but there are mixed reactions including Citi warning that GenAI will cut jobs in banking, younger Americans saying the tech will improve financial planning, and regulators concerned about it being used correctly.
However, in a BCG poll of major financial institutions, 85% said GenAI will be a highly disruptive or transformation force but 82% do not have a clear long-term pathway for its use.
“GenAI and other AI tools will disrupt the traditional ways of working for wealth managers,” said Akin Soysal, a BCG managing director and partner and a coauthor of the report. From client acquisition and onboarding to servicing and ongoing support, there are many ways that technology will streamline operations—also in the area of compliance—while improving customer experience. The challenge for wealth managers is to know where to begin.”
From 401(k)s to retail funds, Deloitte sees private equity and credit crossing into mainstream investing on two fronts at once.
Big-name defections from Morgan Stanley, UBS, and Merrill Lynch headline a busy two weeks of recruiting for the wirehouse.
Markets have always been unpredictable. What has changed is the amount of information investors are trying to process and the growing role advisors play in helping clients avoid emotional decisions
Six apartment deals, one "big account," and $2.7M in undocumented insider loans. Now the lawsuit lands
The Illinois order refers to Brandon Ellington’s investment program as a “Ponzi-like scheme.”
Wellington explores how multi strategy hedge funds may enhance diversification
As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management
