Financial planning and wealth management - Essay Example

The World Wealth Report 2013 has been prepared by Capgemini and Royal Bank of Canada jointly. This report shows that 2012 was started with a sluggish beginning with low levels of GDP of most of the economies around the world. However, with efforts from the national governments, economic activities in the world have increased considerably (The wealth report, 2012). Eventually, HNWIs (individuals possessing US$1 million or more investable assets) have ultimately benefitted, as the international market has strongly turned around towards the end of 2012.

The report presents the analysis of data collected through survey of more than 4,400 HNWIs belonging to twenty one countries. This makes the study one of the most data rich and highly relevant studies for present economic times. Background The report sheds light on three distinct peripheries; levels of confidence held by HNWIs in the international market, their long term investment objectives, their investment pattern and plans and most importantly, the types of relationships maintained by them with advisors and wealth management firms.

The investment pattern of these individuals determines the flow of investment around the world and affects the services offered by the advisors. The type of service demanded by the firms, casts significant influence on the actual investments that would be made throughout the year (Kennedy, 2011). Secondly, the nuances involved in wealth advisor-HNWI relationships have been studied in detail. Emerging opportunities for investment of wealth have been identified and recommendations have been made for improving the relationships between wealth managing firms and all segments of HNWIs.

The impact of changes in the national regulations as well as the regulations of the international bodies, such as the Euro zone, during and after the financial crisis, is expected to cast major impacts on the investment climate around the globe. Impact of such changes on individuals and firms has been explored to assess the effect it casts on world wealth. Growth of HNWI Market Analysis of HNWI population and investible wealth shows that the HNWI Market has taken a grand leap forward since 2012.

Total HNWI population in the world has increased by 9.2% in between 2011 and 2012 and reached the figure of 12 million. Financial market performance also shows impressive improvements, which has been the cause of substantial growth HNWI wealth. Although, there was a fall in aggregate investable wealth in 2011, it again increased by 10.0% and reached a record level of US $46.2 trillion. Market observers have forecasted that the HNWI wealth is expected to grow at the rate of 6.5% annually in the coming two years consecutively.

It would touch the US $55.8 trillion orbit by 2015 (Capgemini, 2013). This growth would mainly be driven by expansion of HNWI wealth in the countries in Asia-Pacific region (Durgy, 2013). It is evident from the data that the developing countries are showing greater growth rates than the developed countries. Although, developing economies have been hit hard by the breakdown of the global financial system, these countries offer greater opportunities for growth. Population growth rates in these countries are high and economic activities are increasing at an increasing rate.

Therefore, the process of capital accumulation occurs more spontaneously in these economies than the develo