The survey reveals that the wealthy in the emerging markets have been less affected by the recent downturn than their counterparts in the developed markets, and are also much more optimistic about the future prospects for the global economy. This optimism is due, in part, to the strong relative performance of the economies in which they live. However, survey respondents overall do not think that the recovery of the global economy will be straightforward, and appear more pessimistic than professional economists.
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The downturn may have prompted many to think about what wealth means, and how they should use their wealth. Major regional differences are evident here, with Europeans much less likely to see wealth as a means of getting the respect of friends and family than the wealthy in the emerging markets. Europeans are also much more likely to prioritise spending on themselves (e.g. on travel), while US respondents focus more on charitable giving and Asia-Pacific respondents are more concerned with social issues.
In regards to investment management, it is possible to see a number of themes running clearly across the regions, and this encourages us to suggest three key themes for the future:
Hard-working wealth. The wealthy want their portfolios to produce results. They are prepared to work hard to ensure this - and will expect others to do so too. In an era of relatively low interest rates and overall returns, this will require a hands-on approach. This may be an era where technology becomes the driving force; from the minutiae of real-time performance reporting, to much bigger issues of investment strategy.
Holistic wealth. Many want more from their wealth than a simple paper return. Wealth will be deployed to help specific firms, sectors or charitable endeavours. Many new skills will need to be learnt and deployed, for example in the intermediation between the wealthy and individual entrepreneurial organisations - business or charity.
Co-operative wealth. This may be an era where - aided by technology - the wealthy may increasingly operate in peer-to-peer networks, or engage in different ways with governments or their wealth managers, to reach their objectives - both financial and social.
This report has highlighted the divergence of opinion around the world on what the next decade will mean for wealth and wealth creation. The progress of emerging markets, and their increasing influence on the global economy, is reflected at a local level in an optimistic outlook for the coming decade, whereas the majority of developed economies are cautious regarding the global economy's prospects for growth. What this tells us is that the global outlook of individual investors is heavily tainted by their experiences within their own local market. Overall, the wealthy tend to be more pessimistic than professional economists about global economic prospects, and they may have good reason for this, as the escalating burden of public debt will make it more difficult for policymakers to keep the global recovery on the road, as evidenced by recent events in Greece.
The global downturn has also put a spotlight on the meaning of wealth. What wealth means to people varies markedly from country to country and analysis of spending priorities uncovers distinct social attitudes. For some Europeans, wealth is a vehicle for quality-of-life improvement. By contrast, in the emerging markets, the social implications of wealth may be of more importance. Spending on education is a top priority for Latin Americans and charitable giving has greater focus for the US. The concept of wealth as commanding respect is diminishing in Europe, while respondents in Asia Pacific and Latin America view being wealthy as worthy of respect from friends and family. These cultural differences could have huge implications for wealth creation and management in the next decade as local markets maintain differing ambitions and expectations for the opportunities that their wealth affords.
While their economic outlook and spending priorities may differ widely from country to country, what draws together wealthy individuals around the world is a growing 'wealth consciousness'. The global downturn has brought about a greater desire for information and closer involvement with their own financial affairs. The emergence of the new 'engaged investor' will see the wealth management industry respond with greater transparency and a more discursive relationship with clients. The continued uncertainty around the prospects and timing of the global recovery may be causing investors to favour the more familiar asset classes of equities and property, despite the former's poor performance over the last decade.
But, while wealthy individuals are holding faith that over the long term their investments will bear fruit, they will require more information on investment performance and other matters. The wealth management industry will need to adapt quickly to ensure that it provides the level of support investors are seeking.
The wealth map is evolving - as emerging markets grow in influence, wealth will no longer be concentrated in developed economies. As this report makes clear, the economic, cultural and social influence of the emerging markets' wealthy will continue to shape global attitudes to wealth as we move into the next decade and a new era for wealth.