We are used to hearing the rich are getting richer but the credit crunch last year has taken its toll. Now it seems the rich are getting poorer faster than anyone else.
This is certainly a change of direction for wealthy investors as Merrill Lynch unfurls its global wealth management annual report today.
The super-rich – those who have at least $30m to invest – have seen their wealth plummet by nearly 24 per cent, while the rich – worth $1m or more – suffered a little less as they watched their assets dwindle almost 20 per cent to $33,000bn.
So why are they losing money faster than anybody else?
The wealthy typically have higher exposure to equities, hedge funds and private equities and have seen their assets decline steeply in last year’s volatile markets, explains Nick Tucker, managing director of Merrill’s wealth management business.
And it’s not just bad news for rich individuals, worth $1m, and the super-rich – those who have at least $30m to invest – but also for the wealth managers who are looking after their investments.
More than 45 per cent of investors polled have lost trust and confidence in their wealth managers, who will need to step up their services to prevent their rich clients heading for the door, just at a time when their revenues are shrinking.
Wealthy individuals in the UK can also brace for a shock as China’s millionaires have overtaken them to take fourth place.
Now the name of the game is scaling back as the rich spend less on luxury goods, cut back on giving to charities and are even forced to sell private jets. But gyms around the world will be glad to note spending on health and fitness has not missed a beat.