EUROPE displaced North America as the world's richest region last year as measured by assets under management, a survey by the Boston Consulting Group said.
North America, defined as the US and Canada, had $US29.3 trillion ($A34.1 trillion) in assets under management, compared with $US32.7 trillion in Europe in 2008, according to the survey. The US remains the wealthiest country, with $US27.1 trillion, and has the highest number of millionaires - almost 4 million. Japan is at No. 2, with $US13.5 trillion and more than 1 million millionaire households.
Global wealth dropped for the first time since the survey started in 2001 as assets under management decreased 11.7 per cent to $US92.4 trillion last year from $US104.7 trillion a year earlier as the credit crisis sent stock indices to their worst annual losses since the Great Depression and slashed the value of real estate holdings, hedge fund and private equity investments in 2008.
The biggest drop occurred in North America, where wealth plunged 22 per cent. The second-biggest decline was in Japan, where wealth fell almost 8 per cent. Latin America, defined in the survey as Mexico, South America and Central America, was the only region where wealth grew, by 3 per cent.
Wealth is expected to begin a slow recovery next year, according to the survey. Assets under management will grow at an average annual rate of 3.8 per cent from the end of 2008 until 2013 to $US111.5 trillion.
The number of millionaire households globally fell to 9 million from 11 million, with North America and Europe both experiencing decreases in the number of millionaire households by 22 per cent. The results are similar to a survey released in June by Capgemini and Merrill Lynch & Co that found the number of millionaires fell 15 per cent to 8.6 million.
Singapore has the highest concentration of millionaires, with 8.5 per cent of the nation's households having more than $US1 million in assets under management, the report said.
The amount of wealth kept offshore fell to $US6.7 trillion last year from $US7.3 trillion in 2007 as regulators pressured countries such as Switzerland to cut down on bank secrecy. Switzerland accounts for 28 per cent of offshore assets and Britain for 23 per cent.
Investor confidence had been ''shattered'' by markets, scandals and failed financial institutions, said Bruce Holley, a senior partner at Boston Consulting Group's New York office. That had resulted in a shift to lower-risk asset classes and investments that were liquid and simple, he said.
It was estimated that larger brokers such as Morgan Stanley and UBS might lose a combined $US188 billion of assets this year as advisers moving to independent firms took clients with them, Boston-based consultant Cerulli Associates said last week.
The largest brokerages' share of assets under management is expected to drop to 40.7 per cent by the end of 2012 from 47.7 per cent, according to the Cerulli report.
BLOOMBERG
