Gains in global personal wealth ground to a near-halt in 2018, rising just 1.6% for the weakest growth in five years, according to an analysis by Boston Consulting Group (BCG).
The Boston Consulting Group's annual global wealth report found that the world's wealth rose by a slim 1.6% to $205.9trn in 2018, far below the 7.5% rate seen in 2017.
The "ripple effect" from the worst stock market in 20 years hit HNWIs, and undercut wealth managers' ability to turn a profit, BCG noted.
For the first time since 2008, we saw wealth growth was negative when you take into account all the factors"
Factor in the effect of a rebounding US dollar and asset values actually declined 1.6% last year, wiping out any gain, said Anna Zakrzewski, global leader of BCG's wealth-management practice.
"For the first time since 2008, we saw wealth growth was negative when you take into account all the factors," she said, Bloomberg reports.
North America saw personal wealth drop 0.4% in 2018, while Japan suffered from negative year on year growth of -1.3%.
Meanwhile, Asia as a whole bore the brunt of the world's financial woes, as asset growth there swooned from a 2017 high of 11.5% to 7.1% in 2018.
"The big question now, of course, is whether the pullback in wealth growth is a precursor to deeper changes," the firm's analysts wrote.
"Analysis of major segments, markets, and wealth manager performance suggests that a number of shifts are underway," they said — which include big gains in wealth accumulation outside of North America.
The regions of Latin America, Eastern & Central Asia, the Middle East and Africa are all also expected to increase in growth within the next 5 years. However, analysts stated that Asia's size and rapid growth make it a strategic market.
People with assets of $250,000 to $1m are set to become a new battleground for the world's financial firms as declining margins push them to seek out pockets of wealth further down the scale.
"One of the largest areas for potential expansion is also one of the most overlooked: the affluent segment," according to the report. "This base of potential clients for wealth management services shows extraordinary promise."
The group of affluent people is set to grow at 6.2% over the next five years.