Millionaire growth an opportunity for advisers
Rising numbers of millionaires in the UK will need access to specialist financial advice, which presents a huge opportunity for advisers operating in the high net-worth space.
The number of millionaires in the UK increased from 508,000 in 2010 to 715,000 this year – a rise of 41 per cent – according to research by Barclays Wealth and Investment Management (BWIM), which has forecast that there will be 778,000 UK millionaires by 2025.
London and South East England accounted for 52 per cent of the rise that occurred during the past five years, although every region has seen growth in the number of wealthy individuals, with the rest of the country collectively providing 100,000 additional millionaires.
Commenting on the research, Akshaya Bhargava, chief executive at BWIM, said: “The number of new businesses stands at nearly 350,000 and has been growing year-on-year, and the latest data shows that UK charitable giving increased by £1.1bn in the year to 2013 to £10.4bn.”
After London, Reading was the most prosperous city in the UK closely followed by Cambridge.
The research acknowledged the huge imbalance between London and the South East, and the rest of the country, with the capital and its surrounding region coming first out of 12 regions in each of the 12 measures of economic health that were used by the report.
According to the analysis: “The number of northern start-ups is healthy, with hubs of activity such as North East England, where the ratio of business births to deaths is second only to London.”
However, BWIM’s forecast growth of millionaires to 2025 is a mere 9 per cent increase on 2015. Mr Bhargava said: “The rapid growth in millionaire numbers experienced in the past five years is above the long-term trend, and is likely to be caused by property investment and recent house price growth.”
In seeking to examine the drivers behind affluence, such as business start-ups, property prices and exam achievements, BWIM developed a UK Prosperity Map. It compiled a series of different measures gleaned from official data, including GDP, employment, enterprise, household expenditure and donations to charity to give an overall index score for each region and predict forthcoming growth in the number of millionaires.
Adviser view
John Sterling, chartered financial planner at Saffron Walden-based IFA Walden Capital, said: “We completely agree that the country is getting wealthier and the underlying factor behind this is rising property values. However, outside London growth is more driven by non-financial activity while in London financial services form a far larger proportion of growth.”
