Wealth managers prospecting for clients in the BRICS – Brazil, Russia, India, China and South Africa – will find where the hotspots are due to a new report.

Wealth managers prospecting for clients in the BRICS – Brazil, Russia,
India, China and South Africa – will find where the
hotspots are due to a new report issued by research house WealthInsight. Among
the key facts is that China
made up 40 per cent of the top BRICS’ cities for multi-millionaires (net wealth over $30 million) at the end
of 2011.

There are nine Brazilian cities on the list, five from India, two from Russia
and two from South Africa,
the report, which covers 30 cities in total, said.

“Beijing was the largest
BRICS’ city for multi-millionaires (1,318 individuals), followed by São Paulo (1,310 individuals), Shanghai (1,028
individuals), Moscow
(821 individuals) and Mumbai (577 individuals),” Andrew Amoils, analyst, said.

At the end of last year, there were 1.9 million high net
worth individuals in the BRICS countries, with combined wealth of $7.5
trillion, equal to 11.3 per cent of HNW individuals by number (16.8 million)
and accounting for 11.4 per cent of worldwide HNW wealth ($66 trillion), the
report said.

The total number of HNW individuals in these countries increased
by 30 per cent over the review period from 1.5 million HNW individuals in 2007
to 1.9 million in 2011.

The total number of such individuals in the BRICS is
expected to rise by 76 per cent, to reach 3.4 million in 2016. HNW individual
wealth will see a slightly larger percentage increase, growing by 83 per cent
to reach $13.7 trillion in 2016.

Countries

At the end of 2011, two-thirds 66 per cent of wealthy
individuals in these countries were based in China (1,280,000 HNW individuals). India accounted for 251,000 such persons,
followed by Brazil with
194,000, Russia with 160,000
and South Africa
with 45,000.

The number of HNW persons in China increased by 40 per cent
over the review period, whilst volumes increased by 32 per cent in India, 31
per cent in Brazil and 18 per cent in South Africa. Russia was the only country in the
group to experience a drop in numbers, down 18 per cent.

Over the forecast period, India
is expected to experience the strongest growth in volumes (103 per cent),
followed by China with 83
per cent growth, South Africa
with 41 per cent growth, Brazil
with 40 per cent growth and Russia
with 36 per cent growth.

Regions

Beijing had the largest
collection of HNW persons (1,318) followed by São Paulo
(1,310), Shanghai (1,028), Moscow (821) and Mumbai (577).

Other findings

Banco Itaú controls a quarter of the Brazilian private
banking market, followed by Bank of America (Merrill Lynch) with 8 per cent and
UBS with 7 per cent.

More than 35 per cent of Russian HNW individual wealth was
held offshore at the end of 2011.

The current wealth management leaders in Russia are UBS
and Credit Suisse, with local AuM of $15 billion and $10 billion respectively.
Other prominent foreign players include Pictet and Goldman Sachs. The leading
locally based Russian private banks are UFG Invest, Troika Dialog and Third
Rome.

Over 20 per cent of South African HNW wealth is held offshore.
Most of this wealth is held in the UK,
Switzerland and the Channel Islands. Absa and Investec are the two largest private banks in South Africa by
local AuM.

The wealth management and private banking sector in China is still
in its nascent stage, the report said. It estimates that 9 per cent of Chinese
HNW individuals use private banks and wealth managers. This figure is expected
to rise to over 14 per cent by 2016, the report added.

For the purposes of the report, the phrase “review period”
relates to the years 2007–2011 and the “forecast period” relates to the years
2011–2016.