CAIRO: The financial wealth of the Gulf Cooperation Council has increased by 9% to $7 trillion in 2021, the annual Global Wealth Report published by the Boston Consulting Group has revealed.
The report identified the GCC as the fourth fastest growing region in the world in 2021 after Eastern Europe and Central Asia, which grew by 23%, North America by 15% and Oceania by 14%.
The UAE led the GCC in terms of financial wealth growth. It increased by 20% in 2021 and contributed around 30% to the development of the region.
The financial wealth of Western Europe, Japan and Africa increased by 8%, while Latin America and Asia increased by 7%, according to the BCG press release.
Overall, global financial wealth in 2021 grew 10.6% from a year earlier, the fastest rate in over a decade.
The report further states that global net financial wealth stood at $473 trillion in 2021 and is expected to increase by $80 trillion in 2026.
These figures take into account the current political and economic pressures that could affect this growth.
According to the press release, the financial wealth of Western Europe, Japan and Africa increased by 8%, while that of Latin America and Asia increased by 7%.
In addressing the potential for future growth, the BCG report identified emerging opportunities for wealth managers and encouraged their effective use.
He said the expanded blockchain and crypto arena is an untapped resource for financial advisors and should be used more effectively to generate additional financial wealth in the years to come.
Crypto assets reached a market capitalization of over $2 trillion in December 2021 and are expected to grow four to five times that before the end of the decade. Additionally, 71% of institutions have purchased or intend to purchase crypto assets, the report states.
“About 95% of crypto wealth bypasses traditional wealth management channels,” he clarified, “putting significant value at stake for wealth managers.”
As crypto holds vast potential, wealth managers and executives “need to systematically assess the opportunity, determine when to invest in this space, and identify the best ways to structure their approach” to successfully generate financial wealth important world.
Another emerging opportunity for wealth managers mentioned in the BCG statement was sustainable or net zero investing.
This investment, which grows three to five times faster than traditional investing, should be an “immediate imperative” for wealth managers, the report says.
According to Mustafa Bosca, Managing Director and Partner at BCG, the biggest challenge the industry could face in terms of crypto and sustainability would be to stand still.
“Wealth managers and leaders need to have a plan where they continually test products with their clients, working closely with regulators to shape that,” Bosca said in a webinar discussing the report titled Global Wealth 2022: Standing Still Is Not an Option.
Skilled use of personalization and digitization would further empower wealth managers to produce a greater array of financial wealth in the years to come.
Offering individualized products and services would accelerate revenue growth and demonstrate a higher level of customer satisfaction.
Compared to traditional wealth managers who integrate little digital technology, “digital wealth managers are outperforming them in markets, innovating them more in customer service, and outperforming them in core operational efficiencies,” the report says. .
“To protect their future growth, these wealth managers need to start emulating the practices of these digital leaders,” he added.