Private Wealth Report Shows Surprising Results for Europe’s Investors

Euro Coin on 50 Euro Note Map

Europe, long a bastion of old money, dominated headlines in recent years. But not for its wealth. Au contraire. The news centered on the destruction of wealth, the European Sovereign Debt Crisis, and whether the euro would survive.

Gloom and doom abounded. As a 2014 Forbes article put it: “A lot of people expected Europe to implode”. But it didn’t. In fact, European household net wealth grew by an estimated 1.7 percent in 2013 to reach an all-time high of 56 trillion euros, surpassing its pre-crisis high of 54.5 trillion in 2007, according to a new report by Julius Baer, the Swiss private bank.

European private net wealth is expected to rise by 40 percent over the next five years, to 79 trillion euros by 2019. That’s good news for financial advisers, who stand to benefit from this rising tide of wealth.

Most of the growth is expected to come “from the larger economies recovering from recession, but an increasing contribution may also come from peripheral European economies rebuilding some of the wealth they lost since the financial crisis,” the study said.

The inaugural “Wealth Report: Europe” (.PDF) revealed that despite recent concerns about the region’s economic woes, Europe remains one of the wealthiest regions in the world.

The large “core” countries of Germany, France, the UK, and Italy hold over two-thirds of Europe’s total wealth.

Core Europe has the largest number of wealthy households with Germany boasting 1.43 million millionaire households, France 1.33 million, Italy 818,538, and the UK 796,646.

Wealth-per-adult levels were highest in Luxembourg, where the average adult has around 432,221 euros versus the European average of 167,100 euros per adult.

But wealth did not rise everywhere. The wealth-per-adult level in Spain is 92,341 euros. In Greece it is just 58,877 euros.

According to the report, the largest drops in net household wealth since 2007 took place in Spain (-1.4 trillion euros) and Greece (-170 billion euros).

As is case the world over, the wealthiest 10 percent of European households own more than half of the continent’s wealth.

The report shows that the crisis in Europe has created opportunities for private wealth clients and the financial professionals who manage their assets.

At the upcoming European Investment Conference, investment professionals looking to identify future sources of risk and reward for their clients in the region can hear experts discussing the economic forces at work shaping financial markets in the months ahead. You can follow this blog for updates and additional information from the event.

Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.

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