Global Wealth Reaches New Heights with 22.8 Million High Net Worth Individuals in 2023

A recent study has revealed a new milestone in global wealth, with the number of high net worth individuals (HNWI) reaching 22.8 million in 2023. This represents a 5.1% increase from the previous year.

The total wealth of these individuals has surged to $86.8 trillion, marking a 4.7% increase from 2022. This growth is attributed to the strong performance of stock markets, with major indices such Nasdaq, S&P 500, Paris CAC 40, and Frankfurt DAX experiencing significant gains in 2023.

The Nasdaq, in particular, soared by 43%, while the S&P 500 gained 24%. The Paris CAC 40 and Frankfurt DAX also saw impressive growth, rising by 16% and 20%, respectively. This surge has played a vital role in increasing the wealth of HNWIs worldwide.

This growth marks a reversal from 2022, a year when the number of HNWIs and their wealth fell by more than 3% as a result of macroeconomic uncertainty and geopolitical tensions. The 2023 study highlights a rebound in the global economic outlook, contributing to the recovery in HNWI numbers and wealth.

Why this matters: The growth of high net worth individuals and their wealth has significant implications for the global economy and wealth management industry. This trend could lead to increased economic inequality and calls for greater taxation and regulation of the wealthy.

"2023 brought economic growth and improved fortunes for major investment sectors to reverse the falloff," the report states. "Despite ongoing interest rate uncertainty and rising bond yields, equities surged along with the tech market, fueled by enthusiasm for generative AI and its potential impact on the economy."

The report also highlights the ongoing debate about wealth inequality and taxation. The growing wealth of HNWIs has sparked calls for a global minimum tax on the world's wealthiest individuals, with countries like Brazil and France leading the charge.

The Capgemini study highlights the importance of understanding the financial behaviors and needs of HNWIs. Two-thirds of these individuals plan to invest more in private equity during 2024, seeking growth opportunities amid a shifting economic environment.

Ultra-high net worth individuals (UHNWIs) hold over 34% of total HNWI wealth, despite making up just over 1% of the HNWI population. This concentration of wealth among the ultra-rich has significant implications for wealth management and financial planning services.

The next two decades are expected to see a substantial transfer of wealth, with aging generations passing on over $80 trillion. This transfer is likely to drive demand for financial investment management, tax planning, and non-financial services such as philanthropy and concierge services.

As wealth continues to grow, the role of wealth management firms becomes increasingly critical. Clients are demanding more personalized advice suited to their changing financial situations. Firms are encouraged to offer a personalized omnichannel experience, integrating behavioral finance with artificial intelligence to meet these needs.

The Capgemini World Wealth Report 2024, covering 71 countries and based on surveys of over 3,000 HNWIs, provides a comprehensive overview of the current state of global wealth. The number of HNWIs and their wealth continue to rise, having profound implications for the global economy and wealth management industry.

Key Takeaways

• 22.8 million high net worth individuals (HNWI) globally in 2023, up 5.1% from 2022.
• Total HNWI wealth reaches $86.8 trillion, a 4.7% increase from 2022.
• Strong stock market performance drives HNWI wealth growth, with Nasdaq up 43%.
• Ultra-high net worth individuals hold 34% of total HNWI wealth, despite being just 1% of the population.
• $80 trillion wealth transfer expected over the next two decades, driving demand for wealth management services.