High-net-worth individuals are low on trust and confidence because of the financial market meltdown and global recession, according to the 2009 World Wealth Report, released last week by Merrill Lynch Global Wealth Management and Capgemini. The wealthy don’t believe in the markets, the financial sector, regulators, or the cherished mantras of portfolio management, according to the survey, which analyzes responses from more than 1,350 advisors, 200 individuals, and 60 senior executives at wealth management companies.
The numbers are stark. “At the end of 2008, the world’s population of HNWIs was down 14.9 percent from the year before to 8.6 million, and their wealth had dropped 19.5 percent,” according to the report. HNWIs defined as those with investable assets of $1 million and up (excluding primary residence, collectibles, consumer durables, and consumables). The U.S. population of HNWIs dropped by 18.5 percent but leads the world with 2.5 million; by comparison Germany saw a 2.7 percent decline, while Hong Kong slumped 61.3 percent.