Getting rich quicker

Australians are becoming wealthier and more quickly than residents of other developed countries, according to a new report by Boston Consulting.

In the five years ending 2006, Australian personal wealth increased (in US dollars) by 19.1 per cent, which is more than double the global average of 8.6 per cent.

However, Australia was ranked seventh in the world rankings behind emerging countries such as China (23.4 per cent personal wealth growth), Brazil (22.4 per cent), Hungary (22.3 per cent), Poland (22.1 per cent), Slovakia (22 per cent) and the Czech Republic (19.9 per cent).

Boston head of the Australian financial services practice Matthew Rogozinski said Australia’s performance was a combination of strong financial markets over a long period and superannuation, which encouraged a high level of savings.

“Superannuation is having a very large effect on the way personal wealth is accumulated in Australia relative to most other countries,” he said.

“The net effect has been to substantially increase Australian investors’ allocation towards listed securities at the expense of deposits.”

Although Australians are becoming wealthier, the country still has a long way to go for the concentration of millionaires.

The United States, followed by Japan, UK and Germany, has the highest number of millionaire households.

Boston defines a millionaire as somebody having more than US$1 million in assets under management.

Millionaire households globally own about US$33.2 trillion of assets under management.

The number of millionaire households in Australia grew from 110,000 in 2005 to 135,000 in 2006.

Australia was ranked 12th equal with Belgium among countries with millionaire households.

Rogozinski said Australian millionaire households own 31 per cent of assets under management in 2006, compared to 29 per cent in the previous year.

“Australia’s personal wealth profile is certainly maturing quickly and is now much closer than just a few years ago to the pattern of personal wealth distribution seen in ‘old world’ economies,” he said.

“This represents an opportunity for financial institutions in Australia to develop new models of servicing the premium and private banking customer segments.”

The Boston Global Wealth Report is in its seventh year and measures trends in 62 countries representing 96 per cent of global gross domestic product.

According to the report, global wealth in 2006 is now at US$97.9 trillion, which is a 7.5 per cent increase on the previous year.

North America and Europe account for 71 per cent of global assets under management, the report found.