The second edition of the Very High Net Worth Handbook analyzes the state of the world’s very high net worth (VHNW) population (those with between $5 and $30 million in net worth), revealing that this segment grew by 1.3% in 2020, to 2.7 million individuals worldwide. This was a resilient performance set against the backdrop of a global pandemic and the deepest contraction in world economic output for a generation. In addition, the combined net worth of the VHNW population nearly mirrored this modest growth, rising 1.2% to $26.8 trillion.
While VHNW individuals share many characteristics with their wealthier counterparts, they are nevertheless a unique cohort, with distinctive traits relating to everything from the origins of their wealth and how they allocate their assets to their hobbies, non-financial interests and passions.
THE VHNW POPULATION GREW BY NEARLY 8% IN 2020, WHILE THE GLOBAL POPULATION GREW ONLY 1.3%
Key insights from the Very High Net Worth Handbook 2021 include:
- The US VHNW population grew by nearly 8% in 2020. Among the Top 10 VHNW Countries (pg. 13) the US, China, Japan and South Korea all performed well.
- North America and Asia were, by far, the best performing global regions. The remaining five regions posted falls in their VHNW populations and combined wealth, with Latin America and the Caribbean seeing the largest decline.
- London fell out of the top 10 VHNW cities for the first time. The city’s VHNW population fell by a substantial 16% in 2020, dropping London from eighth place in 2019 down to 12th. London’s VHNW cohort contracted at a faster rate than that of the UK as a whole, which itself saw a sizeable decline.
- San Jose, California has the highest density of VHNW individuals by far.With a relatively modest general population of around 2 million and its status as the wealth center of Silicon Valley, the metro area of San Jose has one VHNW individual for every 66 city residents. San Francisco and three Swiss cities — Basel, Geneva and Zurich — also rank highly for VHNW density.
- The average age of VHNW individuals is 60, with more than half of the population between 50 and 70. The UAE, Bangladesh and Qatar have the youngest VHNW populations — they represent economies where wealth creation has been fairly recent.
- There is an uneven distribution of global wealth among the VHNW population. With the average net worth per individual at $10 million, two-thirds of the VHNW class have a net worth that places them in the lowest of the cohort’s four wealth tiers ($5 million to $10 million), commanding just under half of total VHNW wealth.
- By 2025, the global VHNW population is forecast to total 3.8 million individuals. An increase of 1.2 million from 2020 will be driven, in part, by a rebalancing of wealth across regions.
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METHODOLOGY
Wealth-X proprietary data assets empower our clients with both a top-down and on-the-ground understanding of the wealthy.
To size and forecast the wealthy population and its combined wealth, Wealth-X Analytics leverages our Wealth and Investable Assets Model. This model produces statistically significant estimates for total private wealth and estimates the size of the population by level of wealth and investable assets for the world, for each of the top 75 economies, and for over 100 of the world’s major cities.
To profile the characteristics of the wealthy, we use our unique and proprietary Wealth-X Database, the world’s largest collection of records on wealthy individuals from around the globe. Each Wealth-X Dossier provides insights into an individual’s financial profile, career history, known associates, affiliations, family background, education, philanthropic endeavors, passions, hobbies, interests and much more.
Wealth-X partners with prestige brands across the financial services, luxury, not-for-profit, and higher-education sectors to fuel strategic decision-making in sales, marketing and compliance.
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