The wealth of the world’s high net worth individuals (HNWI) grew at the fastest rate for seven years in 2006, expanding by 11.4% to reach $37,200bn, according to the 11th annual World Wealth Report issued by Merrill Lynch and Capgemini (see private banking, page 46).
The number of HNWIs (individuals with net assets of at least $1m, excluding their primary residence and consumables) increased 8.3% to 9.5 million and the number of ultra-HNWIs (net assets of at least $30m) grew by 11.3% to 94,970.
Real GDP and market capitalisation growth rates – two primary drivers of wealth creation, which accelerated throughout 2006 – are said to have boosted the number of HNWIs worldwide and the amount of wealth they control.
Wealth gains were strong in Latin America, Africa and Asia-Pacific, growing by 23.2%, 14.0% and 10.5% respectively. The biggest growth in HNWI population was in Singapore and India, where numbers rose 21.2% and 20.5% respectively.
The globalisation of wealth creation has accelerated, the report said, and although global economic growth is expected to slow down in 2007, HNWI financial wealth is expected to reach $51,600bn by 2011.
KPMG FORENSIC:
GLOBAL ANTI-MONEY LAUNDERING SURVEY 2007
Estimated money laundering flows via drug dealers, arms traffickers and other criminals are reported to be in excess of $1000bn. Following its 2004 anti-money laundering (AML) study, KPMG Forensic surveyed over 220 banks from 55 countries. It found the cost of fighting money laundering has risen dramatically across the world in the past three years.
The latest report showed spending on AML systems and processes has risen by an average of 58%, and in North America, the Middle East and Africa by 70% or more. This is higher than banks’ 2004 forecasts, but banks predict an increase of only 34% in spending over the next three years.
The report suggests banks are concerned that governmental and international regulation needs to be targeted more effectively: “As banks develop more risk-based AML programmes, the pressure will be to focus on using resources within compliance effectively and efficiently, and this may involve considerable reallocation of resources within compliance as well as cost reduction through outsourcing, offshoring and centralisation of AML functions,” it said.
It says 85% of internationally active banks said they had a global AML policy in place.
