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HNWIs increasing, but less quickly

HNWIs increasing, but less quickly

Advisers serving high net-worth individuals may be competing in a tighter market as growth in the number of UK millionaires has slowed down, research has suggested.

According to the 48-page World Wealth Report 2015, released by Capgemini and RBC Wealth Management, the number of HNWIs – who are defined as those having investable assets of US$1m (£636,500) or more – in the UK increased from approximately 527,000 in 2013 to 550,000 in 2014.

The amount of HNWI investable wealth in the UK increased from US$1.895trn (£1.206trn) in 2013 to US$2.003trn (£1.275trn) in 2014.

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YearNumber of HNWIs in the UK
2013527,000
2014550,000

Source: World Wealth Report 2015

According to the report, which drew on surveys among HNWIs and wealth managers as well as executive interviews and other research, figures revealed a slow year in terms of global HNWI growth.

The report said: “HNWI population and wealth grew more modestly in 2014 than in most of the past five years, indicating that wealth managers and firms are challenged with working harder to develop and nurture new relationships.”

According to the study in 2014, UK HNWIs invested 29.3 per cent of their portfolios in equities while 23.7 per cent was allocated to cash and cash equivalents, 18.9 per cent to real estate, 15.8 per cent to fixed income and 12.3 per cent to alternative investments.

It also found that 15.5 per cent of their assets were financed through credit, compared to 17.8 per cent globally.

Penny Lovell, head of client services at Close Brothers Asset Management, said: “As the UK HNWI population grows, the role of integrated financial and investment advice becomes even more important.”

The report revealed HNWI interest in both making a social impact and automated advisory services.

Globally, 48.6 per cent of HNWIs had a propensity to use automated services, compared to 20 per cent of wealth managers. In the UK 42 per cent of HNWIs had a propensity to use automated services.

Brett Williams, managing director at SEI Wealth Platform, UK Private Banking, said wealth managers should strike a balance between new technology and older techniques, adding: “It is important not to overlook traditional face-to-face contact as a key relationship-building tool.”

Adviser view

Matt Phillips, managing director of London-headquartered Thomas Miller Investment, said that technology would allow more human interaction rather than less between advisers and clients. He added: “We see the adviser and robo-adviser working alongside each other.”

Email: david.baxter@ft.com