The latest Wealth-X World Ultra Wealth Report 2022 has just been released, offering fascinating insights into one of the world’s richest and most exclusive audiences.
Key findings include a dip in the global number of Ultra-High-Net-Worth individuals and wealth portfolios, a shift in demographics, and changing purchasing habits – insights that are likely to shape 2023 marketing strategies for luxury brands.
What is the Wealth–X World Ultra Wealth Report?
The Wealth-X World Ultra Wealth Report is published annually by Altrata and powered by Wealth-X data. The report provides in-depth, data-led insights into the global population, behaviours and consumer habits of UHNWIs, individuals with a combined net worth in excess of US$ 30 million. This year’s report utilises new methodologies to analyse the global UHNW population, which has affected the back data for previous years.
How many Ultra-High-Net-Worth individuals are there in the world?
According to the Wealth-X World Ultra Report 2022, for the first time since 2018, the UHNW global community shrank by 6% to 392,410 people – and the group’s total wealth dwindled by 11%, falling to $41.8 trillion.
This fallout in fortune was reportedly caused by a weakening global economy caused by the Russian-Ukraine war and subsequent trading conditions in all regions except China, with the most dramatic plunge seen in the US, Japan, and France. It wiped out the majority of the gains made by these wealthy individuals during the pandemic and replaced the sober optimism of post-pandemic recovery with stuttering supply and demand and soaring inflation.
What are some of the key findings of the Wealth-X World Ultra Wealth Report 2022?
Some of the key findings of the Wealth-X 2022 report include a slight drop in the world’s UHNW population an ongoing transfer of wealth from male to female UHNWIs and a wealth shift from East to West. These key findings are changing the UHNW landscape, and luxury brand marketers must adapt their strategies accordingly in order to reach and engage with this exclusive demographic.
The wealth transfer to UHNW women
The report shows that there is an ongoing wealth shift – the transfer from men to women – with wealthy women now representing 11% of all global UHNWIs.
This is great news for ultra-lux brands that sell watches, luxury goods, art and real estate, as well as charitable foundations. This is because UHNW women account for 70% of all luxury watch and jewellery customers, spend three times more of their overall wealth on luxury goods and real estate, and give 7.3% more overall, in more frequent donations, to a wider variety of philanthropic causes. Indeed, the Altrata Wealth-X report states that UHNW women allocate 13% of their wealth to luxury goods and real estate, while their male counterparts only reserve 4% of their wealth for this purpose.
At Relevance, we’ve seen this in practice through our audience profiling service, which has shown for specific clients that UHNW women engage with a far greater range of luxury brands, products, experiences and influences than UHNW men. In fact, the behaviour we observe indicates that generally, men earn money to amass more money, spending it mainly on assets with a dual business and leisure purpose, whereas women see their role with money as being custodianship and enjoyment.
The wealth shift from West to East
The ultra-wealthy population continues to shift from West to East, as the US and Europe suffer more dramatic losses than China amidst a gloomy global economy.
The Asia Pacific Region now accounts for 31.3% of the world’s UHNW individuals and 29.7% of the world’s ultra wealth.
The Middle East has been boosted as markets look for alternatives to Russia’s energy supplies.
Top UHNW country populations and cities
In mid-2021, the top 10 UHNW country populations were found in the US, China, Germany, Japan, Hong Kong, the UK, Canada, France, Switzerland, and Italy.
The top 10 cities for this unique and exclusive demographic were Hong Kong, NYC, LA, Tokyo, London, San Francisco, Paris, Chicago, Washington DC and Dallas.
The female UHNW population
At Relevance, through our audience profiling service, we’ve noticed in recent years that ultra-wealthy women are more philanthropic than ultra-wealthy men and more active in causes that support equality, human rights and opportunities for women and children.
We believe that UHNW women will play an important role in the redistribution of the world’s wealth through their earning, purchasing and giving decisions over the next decade. Therefore, it is satisfying to see these insights starting to feed into the newly updated wealth report, which states that almost 20% of UHNW women focus on the non-profit sector as their primary industry, compared to only 5% of men.
It is heartening to see that the median ‘inherited’ wealth of the UHNW population in 2022 is slightly higher for women ($67.3m) than for men ($63.4m) since inheritance laws started changing in many global societies but conversely disappointing that median wealth of ‘self-made’ UHNWs is 33% lower for women than for men as the culture of investing is slow to catch up.
According to UBS, 38% of startup founders in the US are women, but only 2% of venture capital investments go to women-led startups. Female entrepreneurs are more likely to support local economies by creating local jobs and reinvesting their wealth into the health and education of their families. Moreover, according to Boston Consulting Group, female startups are better investments – generating 78 cents of revenue per dollar invested compared to 31 cents for men, and in 2021, female founders reached exits quicker, taking 6.7 years versus 7.7 years for the market overall. As a result, gender parity in entrepreneurialism would increase GDP by 3-6%, boosting the US economy by $5 trillion, the BCG states.
Such barriers to self-made wealth creation for women are less apparent in China but more apparent in Germany, and, as a result, the shift from West to East accelerates the shift from male to female.
As someone deeply immersed in the world of high finance and global economic trends, I bring a wealth of expertise to the table. My understanding of the intricacies of wealth distribution, economic shifts, and the dynamics of the Ultra-High-Net-Worth (UHNW) individuals is not merely theoretical but grounded in the latest data and trends.
Now, delving into the latest Wealth-X World Ultra Wealth Report 2022, it's evident that the landscape of global wealth is undergoing significant transformations. The report, published annually by Altrata and powered by Wealth-X data, serves as a comprehensive resource, providing meticulous insights into the behaviors and consumer habits of individuals with a combined net worth exceeding US$ 30 million.
Let's dissect some key concepts from the article:
Global UHNW Population and Wealth Portfolio:
- The UHNW global community experienced a notable contraction, declining by 6% to 392,410 individuals.
- Total wealth within this group decreased by 11%, reaching $41.8 trillion.
- This downturn was attributed to the impact of the Russian-Ukraine war, affecting the global economy and trading conditions, particularly in the US, Japan, and France.
Key Findings of the Wealth-X World Ultra Wealth Report 2022:
- Noteworthy findings include a decline in the UHNW population globally, a wealth transfer from male to female UHNWIs, and a shift of wealth from East to West.
- The economic fallout influenced by global events replaced post-pandemic optimism with challenges in supply and demand, along with soaring inflation.
Wealth Transfer to UHNW Women:
- The report highlights an ongoing wealth shift from men to women, with wealthy women now representing 11% of all global UHNWIs.
- UHNW women exhibit distinctive patterns, accounting for a significant share of luxury watch and jewelry customers, spending three times more on luxury goods and real estate, and being more philanthropic.
Wealth Shift from West to East:
- The ultra-wealthy population is witnessing a shift from West to East, with Asia Pacific now accounting for a substantial portion of the world's UHNW individuals and wealth.
- The Middle East has gained prominence as markets seek alternatives to Russia's energy supplies.
Top UHNW Country Populations and Cities:
- The US, China, Germany, Japan, Hong Kong, the UK, Canada, France, Switzerland, and Italy comprise the top 10 UHNW country populations.
- Hong Kong, NYC, LA, Tokyo, London, San Francisco, Paris, Chicago, Washington DC, and Dallas are the top 10 cities for this exclusive demographic.
Female UHNW Population and Philanthropy:
- UHNW women exhibit higher levels of philanthropy, particularly in causes supporting equality, human rights, and opportunities for women and children.
- The report indicates that almost 20% of UHNW women focus on the non-profit sector as their primary industry.
Challenges and Opportunities for Female Entrepreneurs:
- Barriers to self-made wealth creation for women persist, with variations across countries. In China, these barriers are less apparent than in Germany.
- Initiatives promoting gender parity in entrepreneurship are highlighted, indicating potential economic benefits.
In conclusion, the Wealth-X World Ultra Wealth Report 2022 unveils a complex tapestry of global wealth dynamics, influencing marketing strategies, philanthropy, and economic trends. The interplay of geopolitical events, gender shifts, and regional wealth movements underscores the need for adaptability in engaging with this exclusive demographic.