New U.S. Wealth Report reveals wealth in technology and energy-centric
cities is on the rise
NEW YORK, MINNEAPOLIS, Sept. 18, 2014 /CNW/ - A continued economic recovery, strong equity market performance, rising
real estate values, and an "energy renaissance" that pushed U.S. oil
production to its highest levels in over 20 years, boosted the
population and wealth of High Net Worth Individuals (HNWIs)1 in the U.S. to record levels in 2013, according to the U.S. Wealth
Report 2014 released today by Capgemini and RBC Wealth Management. The
population of U.S. HNWIs jumped 17 percent to 4 million and their
investable wealth by 18 percent to reach $13.9 trillion. Growth rates
of both the HNWI population and HNWI wealth in the U.S. exceed the
global averages of 15 percent and 14 percent respectively.
"Steady GDP growth, reduced unemployment, a falling deficit, and an
energy renaissance boosted investor confidence and energized risk
appetites in 2013," said John Taft, Chief Executive Officer, RBC Wealth Management - U.S. "These factors contributed to record wealth levels in the U.S. Over the
last five years, some of the strongest growth in wealth occurred in the
energy and technology-centric cities of Dallas, Houston and San Jose,
indicating that a broader mix of geographies and industries is driving
wealth creation in the U.S."
Twelve Cities Are Home to the Majority of U.S. HNWIs
Growth in U.S. HNWI wealth was driven by the top 12 cities2 by HNWI population - New York, Los Angeles, Chicago, Washington D.C.,
San Francisco, Boston, Philadelphia, Houston, San Jose, Dallas,
Detroit, and Seattle - which are home to more than two-thirds (69
percent) of U.S. HNWIs and three-quarters (75 percent) of U.S. HNWI
While New York still reigns, holding almost three times more HNWIs (at
894,000) and wealth ($3.2 trillion) than second-ranked Los Angeles (at
330,000; $1.2 trillion), it recorded the second lowest growth rate (12
percent) in HNWI population of the top 12 MSAs, ranking only slightly
higher than Detroit (11 percent).
Tech and energy-centric cities increasingly leading HNWI population and
The Texas cities of Dallas and Houston were stand-outs, leading in both
HNWI population growth - at 20 percent and 18 percent respectively -
and wealth growth, at 24 percent and 22 percent respectively. In fact,
Dallas entered into the top 10 HNWI population centers for the first
time, edging out Detroit.
While HNWI wealth remains mostly concentrated along the East and West
coasts, the report notes that, between 2008-2013, three of the four
fastest-growing cities in HNWI population and wealth have been those
with ties to energy - in the case of Dallas and Houston, and technology
- in the case of San Jose, pointing to a new pattern of HNWI wealth
creation in the U.S.
Greater risk-taking supported by surging trust in wealth industry
According to the report's Global HNW Insights Survey3, U.S. HNWIs' trust in all aspects of the wealth management industry
surged by double-digit rates between early 2013 and early 2014. Trust
in wealth managers and firms increased 12 percentage points each to 84
percent and 87 percent respectively, putting U.S. HNWIs well above
their peers in the rest of the world4 (71 percent and 72 percent respectively).
Increased trust supported a greater appetite for risk, with allocations
to alternative investments up by four percentage points to 13 percent
of portfolios, while equity allocations remained the highest across the
globe at one-third of portfolios (and up to 41 percent in Washington
D.C., highest in the U.S.). U.S. HNWIs were also more inclined to
invest beyond North American borders, with their international
allocations up to 33 percent in early 2014 from only 20 percent of
portfolios a year earlier. This trend was particularly driven by HNWIs
aged under 40 who invested 53 percent of their wealth in foreign
Despite increased trust in wealth managers, HNWIs' assessment of wealth
manager performance dropped by six percentage points to 73 percent,
though remains much higher than the rest of the world average of 59
percent. Declining scores signal opportunities for firms to reposition
their offerings to meet specific HNWI preferences, especially for HNWIs
under 40 versus their counterparts aged 60 and over.
Younger HNWIs are more likely to classify their needs as complex (38
percent vs. nine percent), seek family wealth advice (35 percent vs. 13
percent) and demand digital (internet, mobile, email) contact over
direct personal contact (39 percent vs. 15 percent).
Given the strong preference for digital interactions, wealth management
firms will need to take proactive steps to meet increasing demands in
"There is great opportunity for wealth management firms to reposition
and strengthen their offerings in response to declining performance
scores," said Jean Lassignardie, Chief Sales and Marketing Officer, Capgemini
Financial Services. "One way to respond to clients is by developing an integrated channel
experience that not only maintains their wealth manager relationship
but enhances it through digital enablement."
As U.S. HNWIs expressed a pronounced preference to work with a single
firm (54 percent vs. 11 percent multiple firms), firms that work with
them will need to continue to deliver against the specific needs of
their clients to drive high satisfaction levels.
Younger and female HNWIs could signal shift in causes supported by U.S.
Making a positive impact on society through investing time, money or
expertise is important to the vast majority (88 percent) of U.S. HNWIs
and extremely or very important to 56 percent. HNWIs under 40 are
particularly focused on driving social impact, with 81 percent citing
driving social impact as extremely or very important.
Younger HNWIs also favor different causes than their older peers (aged
60 and over), citing social programs, race relations, gender
inequality, energy security and unemployment as their top five
priorities, while their older counterparts favor child welfare,
education, and health. Given the rising wealth among younger HNWIs,
there could be a shift in the types of social issues that get the most
attention in the U.S. moving forward.
Female HNWIs are likely to have a greater influence on driving social
impact going forward. As with younger HNWIs, female HNWIs place great
value on driving social impact, with 62 percent citing it as extremely
or very important, compared to 50 percent of male HNWIs.
View the report at www.us-wealthreport.com.
With almost 140,000 people in over 40 countries, Capgemini is one of the
world's foremost providers of consulting, technology and outsourcing
services. The Group reported 2013 global revenues of EUR 10.1 billion.
Together with its clients, Capgemini creates and delivers business and
technology solutions that fit their needs and drive the results they
want. A deeply multicultural organization, Capgemini has developed its
own way of working, the Collaborative Business ExperienceTM, and draws on Rightshore®, its worldwide delivery model.
About Capgemini's Financial Services Global Business Unit
Capgemini's Global Financial Services Business Unit brings deep industry
experience, innovative service offerings and next generation global
delivery to serve the financial services industry. With a network of
24,000 professionals serving over 900 clients worldwide Capgemini
collaborates with leading banks, insurers and capital market companies
to deliver business and IT solutions and thought leadership which
create tangible value. Our wealth management practice can help firms
from strategy through to implementation. Based on our unique insights
into the size and potential of target markets across the globe, we help
clients implement new client strategies, adapt their practice models,
and ensure solutions and costs are appropriate relative to revenue and
profitability expectations. We further help firms develop, and
implement the operational infrastructures—including operating models,
processes, and technologies—required to retain existing clients and
acquire new relationships. Learn more about us at www.capgemini.com. Learn more about our Wealth Management solutions at www.capgemini.com/financialservices.
About RBC Wealth Management
RBC Wealth Management is one of the world's top five largest wealth managers*. RBC Wealth
Management directly serves affluent, high-net-worth and ultra-high net
worth clients in Canada, the United States, Latin America, Europe, the
Middle East, Africa, and Asia with a full suite of banking, investment,
trust and other wealth management solutions. The business also provides
asset management products and services directly and through RBC and
third party distributors to institutional and individual clients,
through its RBC Global Asset Management business (which includes
BlueBay Asset Management). RBC Wealth Management has more than C$700
billion of assets under administration, more than C$442 billion of
assets under management and approximately 4,400 financial consultants,
advisors, private bankers, and trust officers. For more information,
please visit www.rbcwealthmanagement.com
*Scorpio Partnership Global Private Banking KPI Benchmark 2014. In the
United States, securities are offered through RBC Wealth Management, a
division of RBC Capital Markets, LLC, a wholly owned subsidiary of
Royal Bank of Canada. Member NYSE/FINRA/SIPC.
Royal Bank of Canada is Canada's largest bank, and one of the largest
banks in the world, based on market capitalization. We are one of North
America's leading diversified financial services companies, and provide
personal and commercial banking, wealth management services, insurance,
investor services and capital markets products and services on a global
basis. We employ approximately 79,000 full- and part-time employees who
serve more than 16 million personal, business, public sector and
institutional clients through offices in Canada, the U.S. and 40 other
countries. For more information, please visit rbc.com.
RBC supports a broad range of community initiatives through donations,
sponsorships and employee volunteer activities. In 2013, we contributed
more than $104 million to causes worldwide, including donations and
community investments of more than $69 million and $35 million in
sponsorships. Learn more at www.rbc.com/community-sustainability.
1 HNWIs are defined as those having investable assets of US$1 million or
more, excluding primary residence, collectibles, consumables, and
2 "Cities" refers to Metropolitan Statistical Areas (MSAs), which are
geographic entities defined by the U.S. Office of Management and Budget
(OMB) which generally include the named city as well as many important
3 The Capgemini, RBC Wealth Management, and Scorpio Partnership Global
HNW Insights Survey 2014 queried more than 4,500 HNWIs across 23 major
wealth markets in North America, Latin America, Europe, Asia-Pacific,
the Middle East, and Africa. A total of 1,080 HNWIs were surveyed in
the U.S. across 19 MSAs: Atlanta, Baltimore, Boston, Chicago, Dallas,
Denver, Detroit, Houston, Los Angeles, Minneapolis, New York,
Philadelphia, Pittsburgh, Portland, San Diego, San Francisco, San Jose,
Seattle, Washington D.C.
4 The Rest of the World, excludes data from the U.S., and includes data
from the 22 other countries covered in the report: Australia, Belgium,
Canada, France, Germany, Hong Kong, Italy, Japan, Netherlands,
Singapore, Spain, Switzerland, U.S., United Kingdom, Brazil, China,
India, Indonesia, Malaysia, Mexico, Russia, South Africa, and United
For further information:
Courtney Finn (North America)
Weber Shandwick for Capgemini
+1 952 346 6206
Cortney Lusignan (EMEA)
Weber Shandwick for Capgemini
+44 (0) 20 7067 0764
RBC Wealth Management Contacts
Nicole Garrison (North America)
+1 612 371 2999
Paul French (EMEA)
+44 (0) 20 7002 2013