UAE personal wealth crosses $400b, millionaires control $194b
Personal wealth in the UAE increased to $400 billion between 2014 to 2019, with around 48.5 per cent or $194 billion being controlled by millionaires, the Boston Consulting Group said on Monday.
"Despite the current economic decline and precarious outlook globally for the coming years, estimates indicate the UAE will still record sustainable growth across several areas within the wealth segment," said Mustafa Bosca, managing director and partner at BCG."
BCG's findings suggest that the UAE represented 7.1 per cent of the share of personal wealth pool in 2019 in the Middle East and Africa, having grown by 3.8 per cent annually.
"We see three different scenario for GCC wealth. As the GCC wealth stands at $2 trillion, the wealth creation in the region will continue over the next five years and will range between $2.1 trillion to $2.4 trillion by 2024, depending on how quick the region recovers from the coronavirus pandemic," said Bosca.
Personal wealth in the Gulf region increased four times from $0.5 trillion to $2.0 trillion between 2014 to 2019 as growth slowed down in the last couple of years and it looks as a more mature market.
Highlighting the trends, Bosca added that there is a higher allocation towards currency and deposits by GCC residents compared to other parts of the world.
"We see much higher allocation to life insurance, pension, equities and bonds in other parts of the world. In the GCC, we see 60 per cent of wealth is held in currency and deposits. This tells that there is a lot of work to be done by wealth advisors to be able to penetrate the portfolio. And there is a need to diversify portfolio allocation away from currency and deposits," he added.
Globally, only four per cent of individual's wealth is held offshore. In the GCC, this is more than 40 per cent.
"Going forward, an important challenge for GCC wealth managers and governments is how to bring this offshore wealth to the country that will drive the need for funding and growth of the economies in the region," he added.
Global wealth increased from $207 trillion in 2018 to $226 trillion in 2019, growing by over nine per cent. North American controls $100 trillion followed by $47 trillion in Western Europe, $42 trillion in Asia, $18 trillion in Japan, $6 trillion in Latin America, $5 trillion in Oceania, $4 trillion in Middle East, $4 trillion in Eastern Europe and Central Asia, and $2 trillion in Africa.
Over the next five years, the global personal wealth could grow 4.5 per cent CAGR to $282 trillion if world economy quickly rebounds from coronavirus pandemic. But in the worst case scenario where the pandemic will have really severe impact, the global personal wealth will grow at 1.4 per cent to $243 trillion, showed BCG forecast.