HNW and mass affluent wealth drops as riskier investments falter

Wealth has plunged as liquid assets held by the affluent will decline by 10% overall in 2020, according to GlobalData, a leading data and analytics company.

GlobalData expects a fall of 7% in wealth globally, which is down 10pp from the company’s pre-COVID-19 forecast of 3% growth. GlobalData also expects the liquid assets for High Net Worth (HNW) and mass affluent customers in the UK to decline by around £5.2 trillion each as a result of the COVID-19 pandemic.

Andrew Haslip, Head of Wealth Management, comments: “Overall, the liquid wealth of households is expected to fall by 7%. The HNW group are most exposed to high risk assets so are seeing the largest falls. The concern is that the customer base most engaged with the wealth management industry globally is taking the biggest hit. You have to consider there are a lot of assets such as deposits and bonds, which are not moving much and preventing declines from being even larger.

“Growth in the mass market and emerging affluent brackets is due to a couple of reasons. Firstly, a significant number of customers will be falling into lower wealth brackets. Mass market investors numbers, for example, are spiking because customers are still investing in the market, but large numbers of them have fallen from the emerging affluent category. We also see a lot of safer investments such as retail deposits in the mass market group.”

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