Some of the world’s richest people got a financial wake-up call in 2018 — here’s why

The richest people on the planet added fewer members to their exclusive club last year.

The world’s high net worth (HNW) individuals — a net worth of between $1 million and $30 million in assets — grew by just 1.9% to 22.4 million people in 2018, according to data released Wednesday by global wealth consultancy Wealth-X. Their combined wealth also grew by 1.8% to $61.3 trillion, below the rate of global economic growth of approximately 3.7% last year.

Asia‘s high net worth population saw its wealth grow by less than 1% in 2018 (0.6% and 0.3%, respectively). While Asia’s gross domestic product grew by more than 8% in 2018, its stock markets plunged by more than 11% last year, Wealth-X said. “This competing effect has resulted in almost no change in the HNW population and its wealth in the region,” it added.

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In Latin America and the Caribbean, Africa and the Pacific, the number of HNW individuals shrank in 2018 (down by 7.6%, 2.5% and 1.9%, respectively) and their wealth also declined last year by similar rates. While these regions saw GDP expansion in 2018 — except Latin America and the Caribbean — their stock markets were among the worst performers during the year,” Wealth-X said.

There were some exceptions. “Backed by strong GDP growth and relatively more stable equity markets compared with other regions, Europe, the Middle East and North America saw positive growth in their “high net worth” populations in 2018 (4.5%, 3.1% and 2.1%, respectively),” the report added. But it described that level of growth as “medium to low” for that demographic.

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Wealth-X uses a proprietary database of HNW individuals. The database provides insights into their financial assets, career history, known associates and affiliations, family background, education, philanthropic endeavors, hobbies, interests, real estate holdings and business dealings. Their assets include both privately and publicly held businesses and investible assets.

Asia’s rich are expected to grow in the medium term. “There are now as many HNWs in Asia as in Europe, and Wealth-X expects Asia to be the fastest-growing HNW region over the next five years,” the report added. “Building on their existing financial expertise, Hong Kong and Singapore are likely to remain key centers but other markets are developing or importing services to serve HNWs locally.”

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The HNW population exhibits a more equitable gender split than the ultra-high net worth (UHNW) population — those with assets worth $30 million or more — but both demographics remains heavily male dominated. The proportion of HNW women hit 16% in 2018, after rising gradually in recent years, while the percentage of ultra-wealthy women was just under 14%.

As millions of Americans struggle to make ends meet, however, compensation for executives has surged. Pay ratios of Fortune 500 company CEOs to their employees range from 2 to 1 to nearly 5,000 to 1, according to a 2018 report by the staff of Keith Ellison when he was the Democratic congressman for Minnesota; Ellison is now the Attorney General-elect of Minnesota.

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