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					World Wealth Report 2009
                            Chris Selby
          Managing Director and Head of
Merrill Lynch Global Wealth Management Advisory
                      Australia




    in collaboration with
                                          World Wealth Report 2009, June 24th Media Presentation
   Market Sizing and Growth




in collaboration with
                              World Wealth Report 2009, June 24th Media Presentation
Key Findings – Market Sizing & Growth

• In 2008, HNWI population and wealth dropped below 2005 levels
    • The number of HNWIs declined 14.9% to 8.6 million
    • Their combined wealth decreased 19.5% to US$32.8 trillion
• The population of Ultra-HNWIs, individuals with more than US$30 million, fell the most (-24.6%)
  – although this is partly explained by individuals falling to lower wealth bands
• All regions were affected by the market turmoil, highlighting the strong economic
  interdependencies across the globe
• The most significant HNWI declines occurred in the three largest regions: North America,
  Europe and Asia-Pacific
• The global HNWI population is still concentrated, but the ranks are shifting
    • In 2008, the U.S., Japan and Germany accounted for 54% of the world’s HNWI population (up
      slightly from 2007) and China and Brazil moved into the Top 10 rankings
• Despite the negative results of 2008, HNWI wealth is forecasted to reach US$48.5 trillion by
  2013, growing at an annual rate of 8.1%
    • By 2013, Asia-Pacific is forecasted to overtake North America as the largest region by wealth




               in collaboration with
                                                                       World Wealth Report 2009, June 24th Media Presentation
                                                                                                                                4
      The global HNWI population dropped 14.9% in 2008 to 8.6m, led by
      sharp declines in North America, Europe and Asia-Pacific

                                HNWI Population by Region (Millions), 2005 – 2008

                                                                                                                                          Annual Change
                                          CAGR (05-07): 7.2%                Growth (07-08): -14.9%
                                                                                                                                           2007 – 2008
                                                                 Total 10.1 m
                                                   Total 9.5 m                                                   Africa                           -8.3%
                       10   Total 8.8 m                  0.1         0.4
                                                         0.3         0.4              Total 8.6 m
                               0.1                                                        0.1                    Middle East                      -5.9%
                                                         0.4
                               0.3
                               0.3                                                        0.4
                                                                     2.8                  0.4                    Latin America                    -0.7%
                       8                                 2.6
                               2.4
  # HNWIs (Millions)




                                                                                          2.4                    Asia-Pacific                    -14.2%


                       5                                             3.1
                                                         2.9
                               2.8
                                                                                          2.6                    Europe                          -14.4%


                       3

                                                         3.2         3.3                                         North                           -19.0%
                               2.9                                                        2.7                    America

                       0
                              2005                      2006        2007                  2008

Source: Capgemini Lorenz curve analysis, 2009
Note: All chart numbers are rounded



                                     in collaboration with
                                                                                                     World Wealth Report 2009, June 24th Media Presentation
                                                                                                                                                              5
  A similar growth pattern was evident for HNWI Financial Wealth,
  which declined 19.5% in 2008 to $32.8T from $40.7T in 2007

                                                   HNWI Financial Wealth by Region (US$ Trillions), 2005 – 2008

                                                             CAGR (05-07): 10.4%                   Growth (07-08): -19.5%                                                          Annual Change
                                                                                                                                                                                    2007 – 2008
                                              45                                         Total 40.7 T
                                                                          Total 37.2 T       1.0
                                              40
                                                   Total 33.3 T                  0.9
                                                                                             1.7
                                                                                                                  Total 32.8 T                             Africa                          -18.7%
      HNWI Financial Wealth (US$ Trillions)




                                              35                                 1.4         6.2
                                                       0.8                                                                0.8
                                                       1.3                       5.1                                                                       Middle East                     -16.2%
                                                                                                                          1.4
                                              30       4.2
                                                                                             9.5                          5.8                              Latin America                    -6.0%
                                              25                                 8.4
                                                       7.6
                                                                                                                          7.4                              Asia-Pacific                    -22.3%
                                              20

                                                                                 10.1       10.7
                                              15       9.4
                                                                                                                          8.3                              Europe                          -21.9%
                                              10


                                              5       10.2                       11.3       11.7                                                           North                           -22.8%
                                                                                                                          9.1
                                                                                                                                                           America
                                              0
                                                      2005                       2006       2007                         2008


Source: Capgemini Lorenz curve analysis, 2009
Note: (a) All chart numbers are rounded; (b) Due to model upgrades, the number for Europe in 2007 has been updated from 10.6 to 10.7 (and growth from -21.5 to -21.9%)



                                                         in collaboration with
                                                                                                                                              World Wealth Report 2009, June 24th Media Presentation
                                                                                                                                                                                                       6
          All regions were affected by the market turmoil, highlighting the strong
          economic interdependencies across the globe

                                                                     Real GDP Growth Rates (%), 2007 – 2009F
                     15
                                                                                                                                                             13.0



                     10                                                                                                                                             9.0     9.1
                                                                                                 8.1                                         7.8
                                                                                                                6.7
                                                                                                                                                                      6.0         6.0
Percent Change (%)




                                                                                                       5.6                                                                              5.7
                                                                                                                      4.8                                                           5.0     5.1
                      5
                                                                     3.0                                                                                                                                3.3
                                         2.7           2.5                                                                     2.4
                           2.0                                                     2.1
                                 1.1                         1.3                                                                                   1.2                                                        1.4
                                               0.5                         0.7           0.7
                      0
                                                                                                                       -0.4      -0.7
                                                                                                                                                                                                -1.5
                                                -2.2
                                  -3.2                                                    -3.0          -3.0
                      -5                                                    -4.0                                                                                                                               -4.4
                                                              -5.3
                                                                                                                                      -6.4

                     -10                                                                                                                            -8.8
                             US          Canada        Germany         UK           France        Russia         Poland         Japan        Singapore         China          India         Brazil       Mexico

                                                                                                         2007     2008        2009F

                            North                             Western Europe                             Eastern                                         Asia Pacific                                  Latin America
                           America                                                                       Europe

Source: Economist Intelligence Unit – April 2009. Real GDP variation over previous year.




                                          in collaboration with
                                                                                                                                                              World Wealth Report 2009, June 24th Media Presentation
                                                                                                                                                                                                                       7
                In 2008, market conditions turned from challenging to extremely
                distressing

                                              Regional MSCI Global Indexes, Rebased Percent Gain by Time Period, 2008
                                                                (Rebased 1/1/2008, 7/1/2008 = 100)


                                       Global markets deteriorated in H1…                                                                            … before plummeting in H2
                           125                                                                                                     125
                                                                                 H1 change (%)

                                                                                 LATAM          8.0%

                           100                                                                                                     100
 Rebased Index Value (%)




                                                                                                         Rebased Index Value (%)
                                                                                 EMEU / ME a    -6.6%
                                                                                 USA           -12.1%
                                                                                 BRIC          -14.0%
                                                                                 EUROPE        -14.4%                                                                                               H2 change (%)
                                                                                 EM ASIA b     -22.8%
                           75                                                                                                      75
                                                                                                                                                                                                   USA             -30.4%
                                                                                                                                                                                                   EUROPE          -38.1%
                                                                                                                                                                                                   EM ASIA b       -40.0%

                           50                                                                                                      50                                                              BRIC            -52.7%
                                                                                                                                                                                                   LATAM           -55.1%
                                                                                                                                                                                                   EMEU / ME a     -60.4%


                           25                                                                                                      25
                                 Jan   Feb   Mar        Apr          May   Jun                                                           Jul   Aug      Sep        Oct          Nov         Dec




Source: MSCI Global Indexes for Select Regions, 1 January 2008 - 31 December 2008; Capgemini Analysis.
Note: a) Emerging Europe and Middle East; b) Emerging Asia.




                                             in collaboration with
                                                                                                                                                          World Wealth Report 2009, June 24th Media Presentation
                                                                                                                                                                                                                            8
 Global market capitalization dropped nearly 50% in 2008, resulting in a
 $30T loss

                                          Market Capitalization by Region (US$ Trillions), 1990 – 2008
                                                     CAGR (‘90-’99)                                     CAGR (‘99-’02)                CAGR (‘02-’07)                CAGR (‘07-’08)
                                                        16.4%                                              -13.2%                        22.7%                         -48.6%
                        80


                                                                                                                                                                  63.4
                        60
        US$ Trillions




                        40                                                                      35.0                                                                       32.6

                                                                                        25.4                            22.8                                                      Asia Pacific

                        20                                                                                                                                                        Europe / Africa / Middle East

                         8.9
                                                                                                                                                                                  Americas

                        0
                               1990

                                       1991

                                              1992

                                                     1993

                                                            1994

                                                                   1995

                                                                          1996

                                                                                 1997

                                                                                         1998

                                                                                                 1999

                                                                                                          2000

                                                                                                                 2001

                                                                                                                        2002

                                                                                                                               2003

                                                                                                                                      2004

                                                                                                                                             2005

                                                                                                                                                    2006

                                                                                                                                                           2007

                                                                                                                                                                    2008
                                              Market capitalization dropped below 1999 levels by the close of 2008.
                                              Market capitalization dropped below 1999 levels by the close of 2008.
Source: World Federation of Exchanges, April 2009




                                      in collaboration with
                                                                                                                                                       World Wealth Report 2009, June 24th Media Presentation
                                                                                                                                                                                                                  9
  Looking ahead, HNWI financial wealth is forecasted to recover in all
  regions and to account for $48.5T by 2013

                                                       HNWI Financial Wealth Forecast by Region, 2006 – 2013F
                                                                                                                                                                                   Annual Growth
                                                                                                                      Total 48.5 T                                                     Rate
                                              50                                                                             1.0
                                                                                                                                                                                    2008 – 2013F
                                                                       Total 40.7 T                                          1.9
                                                                                                                                                               Africa                       4.1%
                                                   Total 37.2 T
                                                                             1.0                                             8.0
      HNWI Financial Wealth (US$ Trillions)




                                              40                                      Total 32.8 T
                                                       0.9
                                                                             1.7                                                                               Middle East                  5.7%
                                                       1.4                   6.2
                                                                                          0.8                                                                  Latin America                6.8%
                                                       5.1
                                                                                          1.4                                13.4
                                              30
                                                                             9.5          5.8                                                                  Asia-Pacific                 12.8%
                                                       8.4

                                                                                          7.4
                                              20
                                                                                                        At 8.1%              11.4                                                           6.5%
                                                                             10.7                                                                              Europe
                                                       10.1
                                                                                                     Global CAGR
                                                                                          8.3

                                              10

                                                       11.3                  11.7                                            12.7                              North                        7.0%
                                                                                          9.1                                                                  America
                                              0
                                                      2006                  2007         2008                               2013


Source: Capgemini Lorenz curve analysis, 2009
Note: (a) All chart numbers are rounded; (b) Due to model upgrades, the number for Europe in 2007 has been updated from 10.6 to 10.7 (and growth from -21.5 to -21.9%)



                                                              in collaboration with
                                                                                                                                              World Wealth Report 2009, June 24th Media Presentation
                                                                                                                                                                                                       10
                         Wayne Li
                        Senior Manager
                   Capgemini Financial Services




in collaboration with
                                          World Wealth Report 2009, June 24th Media Presentation
   Focus on Australia




in collaboration with
                        World Wealth Report 2009, June 24th Media Presentation
  Key Findings – Market Sizing & Growth

  • In 2008, the HNWI population in Australia declined by 23.4%
            • From 168,700 at the end of 2007 to 129,200 at the end of 2008
            • The decline was greater than the 14.2% drop in the Asia Pacific HNWI population
  • The total wealth of HNWIs in Australia declined by 29.7%
            • From US$540 billion in 2007 to US$379.8 billion in 2008
            • Again, the decline was greater than the 22.3% drop in Asia Pacific HNWI wealth
  • The average wealth of an Australian HNWI was US$2.94 million at the end of 2008
            • Down 8% from US$3.2 million in 2007, and
            • Less than the global average of US$3.82 million in 2008
  • Australia’s HNWI population was the 11th largest of 71 countries
            • Down from #10 in 2006 and 2007




Source: Capgemini Lorenz curve analysis, 2009
Note: 2007 numbers are restated values due to market sizing model upgrades.



                                 in collaboration with
                                                                              World Wealth Report 2009, June 24th Media Presentation
                                                                                                                                       13
In 2008, Australia experienced slower economic activity across most
sectors as well as falling equity and house prices

                    Real GDP Growth, 2006 – 2009F                                           Change in Market Capitalization, 2006 – 2008
   10.0%                                                                                    50.0%                    36.3%
                                                                                            30.0%                                    18.5%
     5.0%                               4.0%
                         2.8%                           2.3%                                10.0%

                                                                                           -10.0%
     0.0%
                                                                       -0.6%               -30.0%
    -5.0%                                                                                  -50.0%
                                                                                                                                                       -46.6%
                                 2006     2007     2008        2009F                                                          2006     2007     2008


  Source: 2009F based on Merrill Lynch Australia analysis                                   Based on the performance of the All Ordinaries index


            National Savings as a Percentage of GDP,                                          Year-over-Year Change in Established House
                          2006 – 2008                                                                     Prices, 2006 – 2008
     30.0%
                                                                                          40.0%
     27.5%                                                                                30.0%

     25.0%                 25.2%                    24.9%                                 20.0%
                                                                                  24.6%
                                                                                          10.0%
     22.5%
                                                                                           0.0%
     20.0%                                                                                                   2006                       2007                       2008
                                                                                          -10.0%
                       2006                      2007                          2008
                                                                                                                  Sydney       Melbourne        Brisbane        Perth
  Source: EIU Country Reports January, February and March 2009                              Source: ABS - Established House Price Data based on December quarter data



                         in collaboration with
                                                                                                                      World Wealth Report 2009, June 24th Media Presentation
                                                                                                                                                                               14
  The global HNWI population remains concentrated, with the top three
  markets accounting for 54.0% of global HNWIs

                                                                            HNWI Population by Country, 2008

                                             The US accounts for
                                              28.7% of the global
                                               HNWI population
                                                 (30% in 2007)

                            3,000                                                                              In 2008, China continued
                                    2,460                                                                        its move upwards by
      # HNWIs (Thousands)




                            2,500                                                                                passing the UK (after
                                                             54.0% of total worldwide                           passing France in 2007)
                            2,000                               HNWI population
                            1,500                1,366

                            1,000                                 810

                                                                             364           362      346
                             500                                                                                    213          185             164            131            129            127
                               0
                                                                                          Kingdom




                                                                                                                                                                                Australia
                                                                                                                                                  Italy




                                                                                                                                                                                               Spain
                                    United




                                                                                                                                                                 Brazil
                                                                            China, P.R.




                                                                                                      France
                                    States




                                                                  Germany
                                                   Japan




                                                                                                                     Canada




                                                                                                                                  Switzerland
                                                                             Mainland


                                                                                           United




         Position
                                      1             2               3            5           4         6               7             9             8             12             10             11
         Last Year



Source: Capgemini Lorenz curve analysis, 2009
Note: (a) Due to model upgrades, the number of HNWIs for each market has been updated slightly for 2007 although the changes do not affect the country positions



                                          in collaboration with
                                                                                                                                                World Wealth Report 2009, June 24th Media Presentation
                                                                                                                                                                                                         15
                            Chris Selby
          Managing Director and Head of
Merrill Lynch Global Wealth Management Advisory
                      Australia




    in collaboration with
                                          World Wealth Report 2009, June 24th Media Presentation
   Asset Allocation




in collaboration with
                        World Wealth Report 2009, June 24th Media Presentation
  Key Findings – Asset Allocation

    • In response to the crises, HNWIs increased their investments in fixed income and cash-
      based investments
              • Allocations to fixed income and cash-based investments increased 6% from 2007, totaling
                50% of overall HNWI portfolios globally
              • Fixed income allocations rose 2%, while cash and deposit-based investments rose 4%
    • HNWIs increased their allocation to real estate
              • The proportion of real estate in client portfolios increased 4% from 2007, totaling 18% of
                overall HNWI portfolios globally
              • Residential real estate (excluding primary residence) comprised 45% of total real estate
                investments, while commercial real estate comprised 28%
              • Middle East and Asia-Pacific (ex. Japan) had the highest allocations to real estate investments
    •      HNWIs retreated to their home-region and domestic markets
              • All regions increased their allocation to domestic investments in 2008, with an average
                increase of 6.8% from 2007
              • This continues a trend that started in 2006


Calculated using 2008 Capgemini Lorenz Curve analysis and 2008 Global Asset Allocation figures




                                  in collaboration with
                                                                                                 World Wealth Report 2009, June 24th Media Presentation
                                                                                                                                                          18
    Unprecedented market conditions led to a “flight to safety” in fixed
    income and cash-based investments
                                               Breakdown of HNWI Financial Assets, 2006 – 2010F (%)
                        100%
                                                                                                         7%                            7%             Alternative
                                            10%                             9%                                                                        Investments a


                                                                          14%                           18%                           15%             Real Estate b

                                            24%
                         75%
                                                                          17%                                                         20%             Cash / Deposits
                                                                                                        21%
                                            14%
                         50%
                                                                          27%
                                            21%                                                                                       30%             Fixed Income
                                                                                                        29%


                         25%

                                            31%                           33%                                                                         Equities
                                                                                                        25%                           28%


                           0%
                                             2006                          2007                          2008                         2010F
a Includes: Structured products, hedge funds, derivatives, foreign currency, commodities, private equity, venture capital.
b Includes: Commercial Real Estate, REITs, Residential Real Estate (excluding primary residence), Undeveloped Property, Farmland and Other.

Source: REIT Watch, December 2008, http://www.reit.com/IndustryDataPerformance/NAREITStatisticalPublications/REITWatch/tabid/163/Default.aspx, accessed April 2009
Source: March 2007, April 2008 , March 2009 Capgemini/ Merrill Lynch FA survey



                                  in collaboration with
                                                                                                                                          World Wealth Report 2009, June 24th Media Presentation
                                                                                                                                                                                                   19
    HNWIs in Asia Pacific allocated more to real estate (23%) and less to
    fixed income and cash/deposits (43%) than their global peers
                                           Breakdown of HNWI Financial Assets by Region, 2008 (%)

                    100%                                                                                                                                   Alternative
                                    7%                7%                 6%                7%                8%                                  5%
                                                                                                                               9%                          Investments a

                                                                                                                                                16%
                                   18%                                  22%               18%               16%                                            Real Estate b
                                                     23%
                                                                                                                              25%
                     75%
                                                                                                                                                14%        Cash / Deposits
                                                                                                            16%
                                   21%
                                                                                          26%
                                                     26%                30%
                                                                                                                              25%
                     50%                                                                                                                        31%
                                                                                                                                                           Fixed Income
                                   29%                                                                      40%
                                                     17%                                  28%
                                                                        24%                                                   20%
                     25%
                                                                                                                                                34%
                                   25%               27%                                                                                                   Equities
                                                                        18%               21%               20%               21%

                       0%
                                 Global             Asia-             Japan             Europe            Latin             Middle            North
                                Average          Pacific ex.                                             America             East            America
                                                   Japan

aIncludes: Structured products, hedge funds, derivatives, foreign currency, commodities, private equity, venture capital.
bIncludes: Commercial Real Estate, REITs, Residential Real Estate (excluding primary residence), Undeveloped Property, Farmland and Other.
Source: March 2007, April 2008 and March 2009 Capgemini/ Merrill Lynch FA survey



                                 in collaboration with
                                                                                                                                             World Wealth Report 2009, June 24th Media Presentation
                                                                                                                                                                                                      20
 Globally, HNWI allocations to North America continued to erode
 while allocations to Latin America and Europe increased in 2008

                                     Breakdown of HNWI Geographic Asset Allocation, 2006 – 2010F (%)
                      100%                                                      1%     1%            1%             Africa
                                              2%                                3%     3%            3%
                                              2%                                                                    Middle East
                                              7%                                9%     11%          11%             Latin America


                                             21%                                20%
                       75%                                                             19%          21%
                                                                                                                    Asia-Pacific




                                             25%                                25%
                                                                                       27%          25%
                       50%                                                                                          Europe




                       25%
                                             43%                                42%
                                                                                       39%          39%             North America




                         0%
                                             2006                               2007   2008        2010F

Source: March 2007, April 2008, March 2009 Capgemini/ Merrill Lynch FA survey




                                in collaboration with
                                                                                              World Wealth Report 2009, June 24th Media Presentation
                                                                                                                                                       21
   The Current Environment




in collaboration with
                             World Wealth Report 2009, June 24th Media Presentation
                         Wayne Li
                        Senior Manager
                   Capgemini Financial Services




in collaboration with
                                          World Wealth Report 2009, June 24th Media Presentation
   Spotlight




in collaboration with
                        World Wealth Report 2009, June 24th Media Presentation
Key Findings – Spotlight

•   More than 25% of HNW clients surveyed withdrew assets from their wealth management
    firms or left the firm altogether – primarily due to a loss of trust and confidence
     • 46% of clients lost trust and confidence in wealth management firms and advisors
     • 78% of clients lost trust and confidence in regulatory bodies
•   Wealth management profitability was negatively impacted due to lower Assets under
    Management (caused by market losses and attrition) and an increase in clients holding
    low-margin assets
•   There are several strategic levers that can improve client retention and attrition by
    addressing the demand for greater transparency and simplicity. These include:
     • Statement and reporting quality
     • Online access and capabilities
     • Risk management and due diligence capabilities
     • Desired product/investment options
     • Fee structures




               in collaboration with
                                                                       World Wealth Report 2009, June 24th Media Presentation
                                                                                                                                25
  In 2008, over a quarter of clients surveyed withdrew assets or left their
  wealth management firm

                                Client Asset Withdrawal / Left WM Firm                                            Key trends affecting client attrition:
                                          (% of Clients), 2008
                         100%                                                                                 •     Client Age: HNWIs below age 45 had
                                                                                                                    a higher propensity to leave their WM
                                                                                                                    firm, than older clients.
                                        73.4%
      % of Respondents




                         75%
                                                                                                              •     Source of Wealth: HNWIs who earned
                                                                                                                    their wealth through income or business
                                                                                                                    ownership had a higher propensity to
                         50%                                                                                        leave a WM firm, than those who
                                                                                                                    inherited their wealth.
                                                                        26.6%
                         25%                                                                                  •     Advisors: Advisors, aged 41+ and
                                                                                                                    those who worked in teams had a
                                                                                                                    higher propensity to retain clients during
                          0%
                                                                                                                    2008.
                                          No                              Yes




                         With a global HNWI population of 8.6 million holding on average US$3.82 million per HNWI, there was
                         With a global HNWI population of 8.6 million holding on average US$3.82 million per HNWI, there was
                         potentially trillions of dollars of financial wealth changing firms in 2008.
                         potentially trillions of dollars of financial wealth changing firms in 2008.

Source: Capgemini Analysis, 2009; (b) Financial Advisor Survey
Note: (a) Client Q9a) Did you withdraw assets from or leave a wealth management firm in the last 12 months?



                                       in collaboration with
                                                                                                                          World Wealth Report 2009, June 24th Media Presentation
                                                                                                                                                                                   26
We identified a set of strategic levers that can rebuild client trust,
improve retention and drive profitable growth for WM firms
                                        Wealth Management Client Servicing Framework



            BASELINE
           INDUSTRY         L              H        L             H   L            H
                                                      Investment          Investment
                            Service Quality
                                                     Performance            Advice




                                                    L             H
                                                        Reporting &
                                                        Statements
                                                          C A
                            L              H                          L            H
                                Risk
           DIFFERENTATING




                                                                       Fee Structures
                             Management               Pragmatic
                                    C                                        C
               LEVERS




                                                         and
                                                     Appropriate
                                                        Mix of
                                                       Levers
                                                                                                 Lever for Managing Client
                                                                                            C
                                                                                                 Retention and Attrition
                            L              H                          L            H             Lever for Enabling Advisors
                                                                                            A    through Service and Support
                                  Online                              Product/Investme
                                Capabilities                             nt Options              Global Client Priority Level
                                    C                                        C
                                                    L             H                              Global FA Priority Level

                                                    Firm Comms and
                                                                                                 Global Firm Priority Level
                                                        Directives
                                                            A


           in collaboration with
                                                                                         World Wealth Report 2009, June 24th Media Presentation
                                                                                                                                                  27
   Investments of Passion and Philanthropy




in collaboration with
                                  World Wealth Report 2009, June 24th Media Presentation
Globally, HNWIs significantly increased their allocations to Art and
Jewelry in response to economic and market uncertainties

              Investments of Passion Allocations by HNWIs
                                                                                                            • In 2008, Luxury Collectibles remained the
                           2006 vs. 2008 (%)                                                                  primary HNWI passion investment, but
                                                                                                              demand was down.
                                                                   7%             Miscellaneousa
                          16%
                                                                   7%             Sports Investmentsb
                          6%                                      12%                                       • Art and Jewelry took on a renewed
                                                                                  Other Collectiblesc         significance in 2008 compared to 2006
                          14%
                                                                                                              pre-crisis levels.
                                                                  22%
                                                                                  Jewelry, Gems & Watches        • Jewelry increased to 22% compared
                          18%
                                                                                                                   to 18% in 2006
                                                                                                                 • Art increased to 25% compared to
                                                                  25%
                          20%                                                     Art Collections                  20% in 2006


                                                                                                            • HNWIs decreased their allocations in
                          26%                                     27%                                         Miscellaneous investments of passion to
                                                                                  Luxury Collectiblesd
                                                                                                              7% compared to 16% in 2006
                         2006                                     2008

a   “Miscellaneous” represents club memberships, travel, guns, musical instruments, etc.
b   “Sports Investments” represents sports teams, sailing, race horses, etc.
c   “Other Collectibles” represents coins, wine, antiques, etc.
d   “Luxury Collectibles” represents automobiles, boats, jets, etc.

Source: Capgemini/Merrill Lynch Financial Advisor Survey, March 2007, March 2009




                                  in collaboration with
                                                                                                                     World Wealth Report 2009, June 24th Media Presentation
                                                                                                                                                                              29
Health/Wellness topped the spending list in 2008 after being the third
largest lifestyle spending category for HNWIs in 2007

                                       In 2008, to what extent did your clients increase or decrease their
                                            spend on the following Lifestyle Spending categories?a

                                      Decreased                                                                 Increased
    Som ew hat Decreased          Decreased        Strongly Decreased                                 Som ew hat Increased              Increased            Strongly Increased


                                                                     2%
                                                                          3%
                                                                                Health / Wellness               25%                      24%               5%
                                                        5%                                                                                                           54%




                                                                                   Luxury /
       39%         1%       10%                        28%                                                16%          8% 1%      25%
                                                                               Experiential Travel



    43%           2%      12%                          29%                          Luxury           11%         5%    16%
                                                                                  Consumables


                                      19%            5%      6%          8%     Other Spending       7%    4%1%       12%




aTotal for chart will not add to 100% due to some % for Neutral choice
Source: Capgemini/Merrill Lynch Financial Advisor Survey, March 2009




                                in collaboration with
                                                                                                                       World Wealth Report 2009, June 24th Media Presentation
                                                                                                                                                                                  30
 In 2009, Philanthropic giving has a mixed outlook, with Japan
 forecasting growth and North America forecasting a decline
                                                    How is Philanthropic Giving changing in 2009? (%)
                              Decreasing                                                                                           Increasing
                  Slightly Decreasing               Decreasing             Signif icantly Decreasing               Slightly Increasing          Increasing         Significantly Increasing


                                 33%            2% 8%                 23%          Global Average           17%       7%       1%         25%


                                                                                                                                                              1%
                                                        8%           1% 2% 5%           Japan                      35%                          18%                 54%



                                        23%             1%      6%        16%          Europe                23%              8%        2%       33%



                                             20%             4%      5% 11%        Asia-Pacific ex.                                     30%
                                                                                                            19%          11%
                                                                                       Japan


                                     33%               12%             21%           Middle East             21%         2%        23%


                                                                                                                         2%
                               32% 3%                    6%           23%           Latin America       14%         6%         22%



          60%         3%          16%                        41%                    North America      7%     1%     8%


Note: Total for the chart will not add to 100% due to some % to Neutral choice
Source: March 2009 Capgemini/ Merrill Lynch FA survey



                                  in collaboration with
                                                                                                                                   World Wealth Report 2009, June 24th Media Presentation
                                                                                                                                                                                            31
                            Chris Selby
          Managing Director and Head of
Merrill Lynch Global Wealth Management Advisory
                      Australia




    in collaboration with
                                          World Wealth Report 2009, June 24th Media Presentation
   Top 10 Findings




in collaboration with
                        World Wealth Report 2009, June 24th Media Presentation
Top 10 Findings


1. Globally, the number of HNWIs declined 14.9% to 8.6 million and their combined wealth
   decreased 19.5% to US$32.8 trillion – dropping below 2005 levels

2. The HNWI population in Australia declined by 23.4% to 129,200 and their combined wealth
   decreased 29.7% to US$379.8 billion – average wealth/HNWI was US$2.94 million

3. The US, Japan and Germany accounted for 54% of the world’s HNWI population

4. Australia’s HNWI population was ranked 11th out of 71 countries

5. By 2013, HNWI wealth is forecasted to reach US$48.5 trillion by 2013 and Asia Pacific is
   forecasted to overtake North America as the largest region by wealth

6. HNWIs sought refuge in safer investments by increasing their allocation to fixed income and cash-
   based investments – from 44% in 2007 to 50% in 2008

7. HNWIs took advantage of collapsing real estate prices to acquire ‘exceptional assets at
   exceptional prices’ – real estate holdings increased to 18% of HNWI portfolios globally


               in collaboration with
                                                                      World Wealth Report 2009, June 24th Media Presentation
                                                                                                                               34
Top 10 Findings (cont’d)


8. HNWIs are forecasted to selectively increase their allocations to Asia Pacific / emerging markets
   and maintain their exposure to other regions over the next year

9. More than 25% of HNW clients withdrew assets from their wealth management firms or left the
   firm altogether – primarily due to a loss of trust and confidence

10. Globally, HNWIs significantly increased their investments of passion to Art (25%) and Jewelry
    (22%), as these assets were perceived to maintain their value over time




               in collaboration with
                                                                       World Wealth Report 2009, June 24th Media Presentation
                                                                                                                                35
   Questions & Answers




in collaboration with
                         World Wealth Report 2009, June 24th Media Presentation

				
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Description: its is a world wealth report 2009 which states the amount of wealth the worlds richest people have