PBI has drawn on WealthInsight’s research to analyse a specific industry which plays a major part in driving high net worth wealth creation. This month PBI looked at financial services in Switzerland, the US, Singapore, the UK, and Turkey.
Over the past few years, the global financial crisis has severely affected economies worldwide but with new regulations coming into place, the financial services sector is rejuvenating. Banks and regulators had to implement tighter rules to try and counter the loss of reputation they experienced in the midst of the financial crisis.
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As the industry is undergoing some important changes, global wealth consultancy WealthInsight found that some places managed to preserve their reputation as financial hub and to attract HNWIs. Although the financial services sector remains steady in some European countries such as Switzerland or the UK mainly due to their low corporate tax rate and well-structured financial system; they are being seriously challenged by the rise of Asian economies. Despite the on-going crisis, Singapore registered a 14% growth over the year 2010, which accounted for the highest growth of any country in the world after Qatar.
HNWIs with dealings in the financial industry performed inconsistently in different part of the world but the sector remains profitable for UHNW wealth creation.
Key Figures:
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By GlobalData– 2,150,400HNWIs, or 12.8% of the global high net worth population, are involved in the financial services sector.
– Key geographies: Regions with low tax rates and well-structured financial system are a hub for high profile investors.
– Switzerland earned a reputation as offshore banking hub. A report from WealthInsight shows that the financial sector accounts for 11.6% of the country GDP and is the primary source of wealth for 13.8% of UHNWIs. However, the industry suffered from the Eurozone and global financial crisis and saw the number of its HNWIs decreasing by 7.9% between 2007 and 2011. New regulations within the banking sector are affecting HNWIs’ performances and WealthInsight predict a relatively poor growth for 2016.
| Name | Wealth (US$billions) | Source of wealth |
|---|---|---|
| Brenninkmeijer Family | 25,600 | Financial Services |
| Stephan Schmidheiny | 2,620 | Diversified |
| Jean-Claude Gandur | 2,180 | Diversified |
– In the United States, financial services represent the most important industry from which American UHNWIs have acquired their wealth with 16.8% of them involved in this sector. The number of HNWIs doing business in finance rose by 11.5% over the past 6 years to reach more than 6,600 individuals. Financial services constituted 8.4% of the country GDP, a surprising strong performance looking at the global economical situation. WealthInsight reports that 28% of US Billionaires (or 115 UHNWIs) are involved in this sector.
| Ranked by 2011 wealth | Wealth (US$bn) |
Sector | City of residence |
|---|---|---|---|
| Mr. George Soros | 22.0 | Financial Services | New York |
| Mr. John Alfred Paulson | 12.5 | Financial Services | New York |
– Singapore has proved its resilience towards the financial crisis and according to WealthInsight report, registered a 14% rise of its economy in 2010. With 12% of its GDP coming from the financial industry, it represents the largest individual sector on the SGX and accounts for 35% of the SGX’s market capitalization. Singapore had become a new tax haven for high profile investors and strengthened its leading position for HNWIs’ wealth creation.
| Ranked by 2011 wealth | Wealth (US$bn) |
Sector | City of residence |
|---|---|---|---|
| Dr. Yaw Cho Wee | 5.68 | Financial Services | Quemoy, China |
| Mr. Seng Wee Lee | 1.36 | Financial Services | Singapore |
– The financial services sector is the main industry in the UK accounting for 14% of the country’s GDP. Among British UHNWs, 14.6% made their wealth through financial services although WealthInsight reports a particular poor performance over the 2007- 2011 period as their wealth fall by 35% mostly due to the European financial crisis. As the continent is severely impacted by the adversity of the crisis, London, the world’s second largest financial centre, had seen investment shifting its way to the likes of Singapore or Hong Kong. However, financial services are still accounting for 22% of the US$2.9trillion market capitalization on the London Stock Exchange.
| Name | Net worth (US$ Billions) | Source of wealth | Country of Birth |
|---|---|---|---|
| Suleiman Kerimov | 7.8 | Financial Services | Russia |
| Joe Lewis | 3.2 | Financial Services | UK |
| Mark Coombs | 2.1 | Financial Services | UK |
– Financial services represent 13% of the Turkish GDP with 13.4% of the country’s UHNWIs doing business in this sector. WealthInsight’s findings highlight the important growth (8.8%) in the sector over the last ten years as Turkey’s banking and insurance industries developed. It is reported to be one of the few sectors to escape the recession in 2008 and 2009.
| Name | Net worth (US$ Billions) | Source of wealth | City of Residence |
|---|---|---|---|
| Mrs. Semahat Sevim Arsel | 2.43 | Financial Services | Istanbul |
| Mr. Mehmet Rüstü Basaran | 1.16 | Financial Services | Istanbul |
| Mrs. Suzan Sabanci Dinçer | 1.03 | Financial Services | Istanbul |
