Prosperity Report: ‘Lockdown curbs hit GDP, but fail to dent financial wealth’

Despite the Covid pandemic roiling the economic system, monetary wealth in India rose by 11 per cent each year to $ 3.4 trillion, in keeping with a Boston Consulting Group (BCG) report.
In line with the rising financial restoration, the expansion in prosperity and wealth was 11 per cent each year since 2015 and is more likely to broaden within the subsequent 5 years, it mentioned. “India is expected to lead percentage growth of fortunes worth $100 million in 2025,” BCG mentioned.
The rise in wealth is regardless of India’s GDP contracting 7.3 per cent in FY2021 as a result of lockdown and fall in demand within the nation.
According to BCG, India represents 6.5 per cent of the area’s monetary wealth in 2020. “13.7 per cent were the region’s real assets in 2020 which grew from 2015 to 2020 by 12.1 per cent p.a. to $ 12.4 trillion. Liabilities grew by 13.3 per cent p.a. to $ 0.9 trillion and liabilities are expected to grow by 9.4 per cent to $ 1.3 trillion by 2025,” it mentioned.
It mentioned bonds are anticipated to develop the quickest with 15.1 per cent. Life insurance coverage and pensions would be the third largest asset class sooner or later.
Ashish Garg, a member of BCG’s Center for Digital Government, mentioned, “The next five years have the potential to usher in a wave of prosperity for individuals and wealth managers alike. They now have a chance to put that perspective into practice in their own work and pursue a client agenda.”
According to the report, North America, Asia (excluding Japan), and Western Europe would be the main mills of monetary wealth globally, accounting for 87 per cent of recent monetary wealth development worldwide between now and 2025.
“Many wealth management clients in 2020 embraced alternative investments in their quest for higher returns, shifting away from low-yield debt securities,” BCG mentioned. As a part of this pattern, actual property, led primarily by actual property possession, reached an all-time excessive of $235 trillion. Nevertheless, Asia, which has the most important focus of wealth in actual property ($84 trillion, 64 per cent of the regional complete) will see monetary asset development exceed actual asset development (7.9 per cent versus 6.7 per cent) in coming years.
BCG has recognized two engaging markets for wealth managers. One consists of people with easy funding wants and monetary wealth between $100,000 and $3 million. This “simple-needs segment” includes 331 million people worldwide, holds $59 trillion in investable wealth, and has the potential to contribute $118 billion to the worldwide wealth income pool, it mentioned.

Anna Zakrzewski, a BCG managing director and companion, mentioned, “Wealth managers often underserve those in the simple-needs segment with a standardized set of products, and the result is a poor client experience with no “wow” issue. This is basically a missed alternative.”
“To better serve this key segment, wealth managers must embrace a new approach that lets them reach a larger audience in a cost-effective and scalable way, but with a highly personalized offering,” she mentioned.
Retirees, one of many world’s fastest-growing demographics, are one other interesting market. Many are underserved and adversely impacted by the “advisory gap” that prevails throughout the retirement part of life. Today, people over 65 personal $29.3 trillion in monetary property accessible to wealth managers. That determine will develop at a CAGR of near 7 per cent over the subsequent 5 years, enabling wealth managers globally to focus on almost $41.1 trillion in monetary wealth by 2025.