World's super-rich population fell in 2015, says Knight Frank

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The world's super-rich population got smaller in 2015 for the first time in seven years, as the mega-wealthy took hits from see-sawing financial markets, according to a new report.

The Wealth Report 2016 by Knight Frank revealed that the number of Ultra-High Net Worth Individuals (UHNWIs), those whose net assets are over $30 million excluding their main residence, dipped 3 percent last year. That's nearly 6,000 of 187,468 individuals sliding out of the wealth bracket globally.

"This downward shift reflected slower economic growth and the more volatile financial climate [in 2015]," Knight Frank analysts said in the report.

The growth deceleration in equity, commodites and other asset prices last year also dragged down some of the wealthy individuals' net worth, according to the report.

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Financial markets had a turbulent ride last year, with both the S&P 500 and ending lower in 2015, the worst performance since 2008. China's benchmark index fell 45 percent in the span of three months leading to August.

"Sharp falls in the oil price also had a notable effect on the ultra-wealthy in many Middle Eastern and some African countries," said Andrew Amolis, head of research at New World Wealth which provided data for Knight Frank's Wealth Report.

The greenback strength also worsened the declines in local currency wealth for many UHNWIs when their net worth was expressed in dollar terms.

However, it's not all doom and gloom. The UHNWIs long-term growth trend is still positive for the next decade, although at a slower pace compared to 2005-2015.

By 2025, the global population of UHNWIs will shoot up 41 percent from to 263,483, with the ultra-rich to emerge mostly from the United States, China and India, the report said.

The United States is expected to add 19,714 more individuals to the super-rich club by 2025, a 30 percent growth from 2015. Meanwhile China and India, the two largest countries in the world by population, will see increases of 75 percent and 105 percent respectively to their UHNWI community in the next decade.

"Asia especially has been fertile ground for the growth in the number of UHNWIs, with more individuals surpassing the $30 million barrier than in any other region over the last ten years," said Nicholas Holt, head of research for Asia Pacific at Knight Frank.

What's interesting is that the new wealth creation in Asia has impacted the age profile of Asia's UHNWI community, said Holt who added that Chinese UHNWIs are on average 10 years younger than their Swiss counterparts.

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"This reflects the recent nature of growth and opportunities in the Asian markets," he added.

The rise of wealth creation across the world has also shone light on the issue of wealth distribution.

The Knight Frank report highlighted some economists' take on tackling income inequality. Some suggested that taxing the rich could help redistribute wealth, and others have even called for government intervention in markets to ensure even wealth distribution.

However, globalization of wealth creation poses a problem for taxing the wealthy, as individuals and businesses can now choose where and how to invest, which negatively impacts national tax legislation.

Another researcher from the Massachusetts Institute of Technology suggested that the answer to inequality was in property planning policy, because property underpins the net worth of the rich, wrote Knight Frank.

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