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The Wealth Report 2017 Summary

Core Content

The Wealth Report 2017, commissioned by Lord Andrew Hay and written by Knight Frank Research, provides an in-depth analysis of global wealth trends and prime property markets. It reflects on the challenges and opportunities facing ultra-high-net-worth individuals (UHNWIs) and high-net-worth individuals (HNWIs) in a time of political and economic uncertainty.

Main Points of Focus

• Global Political and Economic Landscape: The report highlights the significant political and economic changes of 2017, including the first year of Donald Trump's presidency, the UK's Brexit negotiations, pivotal elections in Germany and France, and China's leadership transition.

• Post-truth World and Uncertainty: With "post-truth" becoming the international word of the year, the report emphasizes the growing uncertainty in fiscal, economic, and political policies. This has led to a more cautious approach among UHNWIs, who are now more focused on capital safety than on return size.

• Wealth Creation and Distribution: Despite the uncertainty, global wealth creation saw a modest increase in 2016, with the UHNWI population rising by 6,340 to 193,490. The number of billionaires also increased to 2,024, a 45% rise over the past decade.

• Political Risks: The report includes an exclusive interview with Ian Bremmer of Eurasia Group, who outlines the top geopolitical risks for 2017, including:

  • Independent America
  • China overreacts
  • Weaker Merkel
  • No reform
  • Technology and the Middle East
  • Central banks get political
  • The White House versus Silicon Valley
  • Turkey
  • North Korea
  • South Africa

• Technology and Its Impact: Technology is both an opportunity and a risk, particularly in the Middle East, where it has disrupted traditional social contracts. Automation is seen as a greater threat to blue-collar jobs than globalization.

• Urban Development and Prime Property: Knight Frank's PIRI 100 report highlights the performance of global prime property markets. Asian cities dominate the rankings, showing the increasing importance of these regions in wealth creation and investment.

• Client-Centric Approach: Knight Frank emphasizes its commitment to market-leading research, a robust technology platform, and exceptional client service. The company has expanded its global presence, including new offices in the Philippines, London, Germany, and the Alps, and has re-established a strong team in Shanghai.

• Family Office Initiative: The report discusses the growing importance of wealth preservation, leading to the launch of a new Family Office initiative aimed at supporting clients in managing their wealth effectively.

• Luxury Spending Trends: The report includes insights into the trends of luxury spending, such as the increasing value of art, cars, and boats. It also explores the shift towards the experience economy and the role of private jet routes in the lives of the wealthy.

• Data and Insights: The Databank section provides detailed data on wealth distribution, including the results of Knight Frank's Attitudes Survey and the City Wealth Index. These insights are essential for understanding the behavior and preferences of the wealthy.

Key Information

• Definitions:

  • UHNWI: Ultra-high-net-worth individual (net worth over US$30 million, excluding primary residence)
  • HNWI: High-net-worth individual (net worth over US$1 million, excluding primary residence)

• Key Themes:

  • The decline of American global leadership and the rise of "Independent America"
  • The growing geopolitical tensions and risks, especially with China and the Middle East
  • The impact of technology on wealth and society
  • The importance of urban hubs in wealth creation
  • The shift in focus from wealth creation to wealth preservation

• Contributors and Thought Leadership:

  • Insights from leading industry commentators and UHNWIs
  • Exclusive interviews and essays that provide a deep understanding of the current global situation

• Future Outlook:

  • The report suggests that the coming years will be marked by increased volatility and uncertainty
  • UHNWIs are expected to pay more attention to the safety of their capital than to the size of their returns
  • The report is designed to help readers navigate this complex landscape and make informed decisions

Conclusion

The Wealth Report 2017 is a comprehensive guide to the global wealth landscape, offering essential insights into the challenges and opportunities facing the world's wealthiest individuals. It underscores the importance of staying informed and adaptable in a rapidly changing world.