ENTERPRISE54 – Among high net worth individuals (HNWIs), it is those in emerging markets and entrepreneurs who are most likely to be planning a move to a different country. 36% of HNWIs in North America who are planning to move in the next five years could head to Europe to retire and enjoy a lower
ENTERPRISE54 – Among high net worth individuals (HNWIs), it is those in emerging markets and entrepreneurs who are most likely to be planning a move to a different country.
36% of HNWIs in North America who are planning to move in the next five years could head to Europe to retire and enjoy a lower cost of living, while 11% of European HNWIs planning to relocate may move to Asia Pacific.
The opening up of markets and rise of technology have led to increased mobility among the global wealthy: 43% have lived in more than one country and 20% have lived in three or more countries.
Almost a third (30%) of HNWIs in South Africa have lived in three or more countries, compared to 14% of HNWIs in the US, 10% in Saudi Arabia and 8% in Hong Kong.
Just under a third (29%) of the world’s wealthy entrepreneurs are planning to move to a different country within the next five years, according to the latest report in the Barclays Wealth Insights series. This means that wealthy entrepreneurs are twice as likely as global high net worth individuals (HNWIs) to relocate – 15% of whom are planning to move to a different country in the next five years.
Launched today (15th September 2014) and based on a global survey of more than 2,000 HNWIs comprising entrepreneurs, business leaders and investors, the Barclays Wealth Insights Volume 18 report titled The Rise of the Global Citizen?, provides an in-depth study into the rise of the high net worth global citizen. The report navigates the global landscape of wealth, examining where individuals today live, work, retire and give their time and money.
HNWIs in emerging markets and entrepreneurs have the greatest wanderlust
The report shows that it is HNWIs in emerging markets and entrepreneurs who are most likely to be planning a move in the next five years, as globalisation, technological advances and political and economic uncertainty in certain regions have led to an opening up of markets and an increase in mobility among the world’s wealthy.=
Across global markets, nearly half (47%) of HNWIs in China and a third in Qatar (36%) and Latin America (34%) are considering a move. While this figure stands at just 10% in South Africa, it is those in Japan, The US and Switzerland who are most likely to remain where they are, with only 7% in Japan, 6% in the US and 4% in Switzerland considering relocating. While the Chinese and Qatari wealthy are the most driven by better educational and employment opportunities for their children (78% and 39% say this respectively), those in Latin America are looking to move to have better economic security (29%).
For wealthy entrepreneurs currently planning a move, 41% are looking to move for economic opportunity, 29% are doing so to start a new business and 27% to pursue an international career, showing that high net worth business owners are increasingly looking to other markets for growth.
An open map
In terms of migration patterns and wealth flows, North America and Europe could see the biggest influxes of global HNWIs (see map below). However regions such as Asia Pacific are also seeing over one in 10 (11%) HNWIs from Europe and one in 20 (6%) of those in North America looking to move there in the next five years, showing the shift of wealth hot spots from West to East. The top overall reasons for considering a move among global HNWIs include having a more desirable climate (35%), economic security (25%) and looking to retire in another region (24%).
Figure one: Planned moves by region:
Increased mobility among the world’s wealthy
The report shows that while just under half (43%) of global HNWIs have lived in more than one country, there are some marked regional differences. Those in India, Hong Kong and the US are the least likely to have lived abroad – 98% of HNWIs in India have only ever lived in one country, compared to 71% in Hong Kong and 69% in the US – while those in burgeoning economies have moved around much more. Almost a third (30%) of HNWIs in South Africa have lived in three or more countries, while this figure rises to 41% for wealthy individuals in the UAE and 65% for HNWIs in Monaco.
Commenting on these findings, Nomkhita Nqweni, the Chief Executive of Wealth and Investment Management at Barclays Africa, said: ‘Although our High Net Worth Individuals in South Africa are highly mobile in terms of the number of countries they have lived in, not many are planning to leave the country when compared to other emerging economies. This could be an indication of the loyalty that HNWIs have to the country, which is positive. This trend should also be seen in the context of a strong link to ongoing economic and wealth creation opportunities in South Africa and the fact that SA is strongly integrated to the global economy. However, the trend for the next generation of HNWIs could be somewhat different as they are set to become global citizens. This has implications for our wealth business going forward as we have to understand these patterns and how they impact our business.’
The next generation of global citizens
While today’s HNWIs are living increasingly global lifestyles, spending more time in different countries, it is their offspring that could ascend to become a truly multinational generation. The majority of HNWIs expect their children to live in more countries than they have done and this belief is especially prevalent in South Africa, where 78% of wealthy individuals hold this belief, as well as emerging economies such as India (91% of HNWIs believe this) and China (90%).