According to the report the number of millionaires will grow by 41 per cent over the next five years to 1.8 million people, representing the third highest growth in the Asia-Pacific region behind Greater China and New Zealand. Credit Suisse predicts the number of millionaires globally will rise markedly over the next 5 years to reach a new all-time high of 55 million people.
Australia ranks 10th in the world for ultra-high net worth households, or those with net wealth beyond $US50 million.
The report shows that Australia has one of the most equitable distributions compared to other developed nations. Just 6 per cent of Australians have net worth under $US10,000, compared to 18 per cent in the UK and 28 per cent in the US. The ranking by median wealth per adult favours countries with lower levels of wealth inequality. Australia at $US191,450 edged ahead of Switzerland at $US183,340 into first place.
Credit Suisse Australia chief investment officer Andrew McAuley argues that many Australians may not feel as wealthy as they really are and that’s largely because we pay little daily attention to superannuation balances.
“There’s been very little real growth in wages and we have seen the costs and necessities go up,” Mr McAuley said.
“I think Australians don’t pay enough attention to superannuation. They notice their house prices going up and down but they are not factoring in that their superannuation is growing quite nicely and that’s what the report captures.”
Australia’s superannuation pool stands at $2.7 trillion and is expected to double over the next decade. Mr McAuley points out that the Australian equity market will not grow at the same rate so Australians need to increasingly consider multi-asset class international portfolios.
Aggregate global wealth rose by 4.6 per cent to $US14 trillion to $US317 trillion during the 12 months to mid-2018, outpacing population growth. Wealth per adult grew 3.2 per cent, raising global mean wealth to a record high $US63,100 per adult.
In terms of average wealth, the Swiss sit on balances of $US530,240, while Australians average $US411,060 per adult while in the US average wealth is $US403,970.
Global wealth is projected to rise by nearly 26 per cent over the next five years, reaching $US399 trillion by 2023, Credit Suisse said. Emerging markets are expected to be responsible for a third of the growth, although they account for just 21 per cent of current wealth.
The bank found women account for about 40 per cent of global wealth. While lifestyle changes over the past century have fuelled the rise in their wealth, the continued gender pay gap results in smaller wealth accumulation prospects for women, Credit Suisse said.
The bank said its research found that women tended to be more risk averse with their investments than men and that women tend to hold more of their assets in non-financial form and have a smaller fraction of their financial assets in more risky forms such as stocks and mutual funds.
Among major countries, Germany has the largest female fraction among its billionaires with 26 per cent, followed by Sweden with 25 per cent, Switzerland with 23.8 per cent, and Australia and India, both with 18.6 per cent, the bank said. Among countries with at least 20 billionaires, Indonesia, Singapore, and Taiwan stand out with zero female billionaires, it said.
The proportion of global adults with wealth below $US10,000 has decreased since 2000. At the beginning of the century, 80 per cent of global adults belonged to this stratum: today the fraction is 64 per cent. “Our projections show it decreasing further to 61 per cent in 2023,” the bank said.