Return to Normal

Published 26 April 2015

The numbers of wealthy individuals in the US has finally rebounded – two-thirds of a decade since the financial crisis.

This is perfect timing as the world looks to the US to push the global economy along for the foreseeable future and as the wheels start to come off elsewhere in Europe and Asia.

In the US, both net wealth levels and sheer numbers now eclipse historic figures as the US continues a slow but steady return to growth and prosperity, according to analysis by CoreData Research.

More than three quarters of wealthy individuals in the US are Baby Boomers or older, with more than half of High Net Worth and Ultra High Net Worth individuals drawn from the Baby Boomer cohort, while pre-Baby Boomers account for close to a quarter of HNW individuals and 28% of UHNW individuals.

The mean income of HNWs decreased after the crisis and despite wealth levels rising, income remains close to 2013 levels, while UHNW income have surpassed pre-crisis levels of mean income.

Most HNWs have had a strong bias towards saving over the past year – the main drivers for saving being retirement, education, liquidity and general future requirements.

Although the number of risk-takers decreased immediately after the crisis, a higher number of HNW and UHNWs are willing to take average to above average risks in 2015.

From a net wealth perspective, an overwhelming majority (83%) of the women in the US reside in the Mass Market segment.

Compare that to males and the difference is staggering. Among males, 17 per cent are High Net-Worth individuals and another 12 per cent are Ultra High Net-Worth Individuals while only 5 per cent of females are HNW and barely 1 per cent are UHNW.

Both HNWs and UHNWs have increased their share of financial assets since the crisis.

Post-crisis, HNWs retained their share of Money Market Deposit and Money Market Mutual Fund Accounts whereas UHNWs have increased their share.

HNWs decreased their holdings of stock mutual funds post-crisis while retaining higher levels of Stock Mutual Funds than UHNWs.

UHNWs decreased their share of directly held bonds after the financial crisis. HNWs have followed the same trend and marginally decreased their share of directly held bonds over the years.

The share of stocks as a part of financial assets decreased marginally for HNWs post-crisis. For UHNWs this decrease has been more pronounced. However while the HNWs remain at their 2010 level of stock holdings, UHNWs have increased their proportion of stocks.

With the US economy performing better both HNWs and UHNWs have an optimistic view of the US economy in the coming years.

Inigo Rudio