Financial Services Association, July 10 (Editor Shi Zhengcheng) With the famous wealth management giant UBS releasing its latest “Global Wealth Report” this week, it is time for the “Global Wealth Inventory Session” that “people who eat melons” are happy to see.

According to the latest report, total global wealth increased by 4.2% in US dollars in 2023, covering the impact of a 3% contraction in total volume in 2022. In terms of the absolute number of million-dollar (dollar) millionaires, the US and mainland China unquestionably occupy the top two positions, with 22 million and 6 million millionaires, respectively. The United Kingdom, Japan, Germany, and France followed in that order.

In terms of percentage, the US has 38% of the world's millionaires, Western European countries combined to reach 28%, and mainland China can reach 10%.

(2023 Global Wealth Pyramid, Source: UBS)

Notably, stories of wealth often carry huge individual differences, even at the national level. According to the UBS report, in 56 markets (countries/regions) surveyed, the average wealth of adults in Cyprus (in local currency) plummeted by 30% in 2023, and adults in Mexico also experienced a painful year of 20% reduction in average wealth.

On the positive side, Turks experienced an astonishing 156% increase in average wealth in a single year. Qataris and Russians ranked second and third, with wealth increases of around 20%. As the top two economies in the world, the average wealth of American adults grew by 2.5% in 2023, about one-third of the growth rate in mainland China.

Of course, all numbers above are based on local currency. If denominated in dollars, the Turkish wealth growth rate would fall back to 63.2%, while Russia would become negative.

Wealth growth is slowing down

As the “plate” of global wealth gets bigger and bigger, the growth rate has also clearly slowed over the past decade or so.

UBS reports that among all the regions sampled, 29 had an average annualized wealth growth rate of more than 10% between 2000 and 2010, but none of them could reach a double-digit growth rate between 2010 and 2023.

Another notable wealth story in 2023 relates to the stock market. The total global wealth mentioned earlier increased by 4.2%, and the MSCI Global Index (ACWI), which is also denominated in dollars, grew 22.8% in one year. Of course, this is more a reflection of the diversification of wealth composition, extending the period to more than ten years. The impact of financial assets on wealth growth is not as unique as last year.

(Financial vs non-financial wealth growth rate, source: UBS)

The “behind-the-scenes” of wealthy people became a hot topic

UBS said in the report that it is expected that within the next 20 to 25 years, about 83 trillion US dollars of wealth will be inherited on Earth. Considering that people over the age of 75 currently hold one-fifth of the world's wealth, and the life expectancy of people aged 75 around the world is roughly between 82 and 86 years old, (UBS expects) quite a bit of wealth to be transferred within the next 10 years.

(Source: UBS)

At the same time, given that the Asia-Pacific region has far more people aged 75 and over than in the Americas and EMEA, the number of cases of wealth transfer will also be several times that of other regions. However, in terms of the amount of wealth transferred, America (US and Canada) is still the largest.

In addition, UBS also mentioned a situation that is often overlooked — inheritance of wealth does not simply mean intergenerational transmission. Since there are differences in life expectancy between men and women, and there is also an age difference between couples, inheritance of wealth between people of the same generation is also a common phenomenon. Of the 83 billion dollars that are expected to change hands, UBS estimates that this situation will account for 9 trillions of dollars.