The cities with the highest millennial millionaire populations were revealed this month by WealthInsight, using data from its proprietary HNWI database. Oliver Williams explains why the ranking matters
Of the top 20 cities in terms of millennial millionaires, the US takes seven spots, with China featuring only once. The top three – Los Angeles, New York and London – each have at least three times more millennial millionaires than Shanghai in fourth place.
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Millennial millionaires – individuals with over $1m in net worth but who are aged under 35 – are critical to the future of private banking.
Estimates on the amount of private wealth due to be transferred from baby boomers to the next generation range from $2.1trn over the next 20 years (UBS/PwC) to $30trn (Wealth-X/NFP) in the next 30 years and $58.1trn between 2007 and 2061 (Deloitte).
Knowing where these successors reside is critical, though so too is identifying where future wealth will be created. Cities that appeal to self-made millennial millionaires – those that have earned their own wealth, mainly through entrepreneurship – are likely to grow in importance in coming years.
In short, these are the cities where private banks should now be dipping a toe in the water to test their popularity with young audiences. Those that do not will be burdened with an aging clientele whose wealth will, one day, vanish from their vaults.
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By GlobalDataThe west coast of the US features strongly on this list thanks to the tech startup culture found around Los Angeles, San Jose, San Diego and San Francisco. These areas are also home to some of the world’s largest companies such as Alphabet and Apple, which offer big pay packages for skilled millennials.
Ambitious millennials are drawn to these cities from around the world. Their tech-savviness, however, means they expect the same from their bank as their employer. Private banks without digital nous are unlikely to have a receptive audience in these Californian cities.
London
London is home to an estimated 19,750 millennial millionaires, nearly four times more than its nearest rival, Paris, which only has 14 more than Rome.
This distorted picture shows just how appealing London is to millennials from around the world.
However, further down the list the European picture is not one of traditional continental capitals: Berlin and Barcelona in 12th and 13th place respectively are both renowned for their strength in tech and telecoms, while old-world banking hubs Geneva and Zurich fail to make the cut.
Dublin is only beaten into the top 20 by Houston. Further down rank Madrid, Stockholm, Manchester and Milan.
Gone are the old banking and political centres. European millennials, it appears, prefer cities with an entrepreneurial culture and quality lifestyle.
Both Saudi Arabia and India have thriving but youthful populations, so it is no surprise to find their political and commercial capitals, Riyadh and Mumbai, ranking highly on the list.
Both countries are also making huge efforts to ensure they retain these bright sparks – Saudi Arabia with its recently unveiled Neom City and India’s easing of business regulations, which has seen it jump 30 places on the World Bank’s East of Doing Business rankings.
However, other emerging countries can suffer from a ‘brain drain’, when educated earners leave for overseas opportunities. This is happening in much of Latin America which does not feature a single city in the list.
Asia rankings
Asia is now home to nearly as many HNWIs as North America, with China accounting for the lion’s share of wealth on the continent. Strange then is the lack of Asian cities on this list: China only has one city in the top 20 – Shanghai – with Hong Kong and Singapore the only other Asian representatives.
Notable absentees here include Tokyo, which has the highest HNWI population of any city, but does not even feature in the longer top 50 millennial millionaire city ranking. Others with large HNWI populations that do not feature include Beijing, Osaka, Seoul, Taipei and Hangzhou.
Japan can cite its aging population for not appearing on any millennial list. Nearly a quarter of the population of Tokyo is over 65, and similar statics concern Osaka.
Upstart China, Taiwan and South Korea, however, are losing many of their millennials to foreign competition. Data from the Hurun Report show that half of China’s HNWIs are considering moving overseas.
The most popular destinations? The US west coast cities of Los Angeles, Seattle and San Francisco.
| MILLENNIAL MILLIONAIRES – TOP 15 CITIES | ||
| Rank | City | number |
| 1 | Los Angeles | 25,249 |
| 2 | New York | 19,966 |
| 3 | London | 19,750 |
| 4 | Shanghai | 6,111 |
| 5 | Paris | 5,920 |
| 6 | Rome | 5,906 |
| 7 | Mumbai | 5,889 |
| 8 | Hong Kong | 5,573 |
| 9 | San Jose | 5,001 |
| 10 | Moscow | 3,743 |
| 11 | Riyadh | 3,465 |
| 12 | Berlin | 2,898 |
| 13 | Barcelona | 2,752 |
| 14 | Toronto | 2,557 |
| 15 | Sydney | 2,248 |
| 16 | Singapore | 2,193 |
| 17 | Phoenix | 2,137 |
| 18 | San Francisco | 2,049 |
| 19 | San Diego | 1,967 |
| 20 | Houston | 1,723 |
Source for rankings: Verdict, GlobalData WealthInsight
