World Wealth Report 2013 Press Conference

Brussels June 18th , 2013

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Introduction

Market Sizing and Key Drivers of Wealth

Findings from the Global HNW Insights Survey

Q&A

Agenda

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Market Sizing and Key Drivers of

Wealth

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High Net Worth population and wealth rebounded strongly by nearly 10% to reach record levels in 2012. Population grew by 9.2% to 12M and wealth by 10.0% to $46.2T.

North America and Asia-Pacific remain the largest HNWI regions and engines of growth; Most of the fastest-growing countries are in Asia-Pacific, however North America reclaimed top spot for largest HNWI population.

While global economic growth was dampened by challenges, HNWIs benefitted from a decline in overall global risk, as actions of European policymakers averted economic disaster, while the U.S. recovered and China managed a soft landing.

HNWI wealth forecasted to reach $55.8T by 2015, driven by Asia-Pacific’s  expected  9.8% CAGR though 2015; Asia-Pacific expected to become the largest HNWI wealth market by 2014.

Key Findings – Market Sizing and Growth

Note: HNWIs hold at least US$1 million in financial assets excluding collectibles, consumables, consumer durables and primary residences; Ultra-HNWIs hold at least US$30 million in financial assets excluding collectibles, consumables, consumer durables and primary residences

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11.5%

Global HNWI population grew 9.2% after remaining flat in 2011; North America regained its number one position

HNWI Population by Region

Backed by economic recovery during the first three quarters of 2012, North America reclaimed its largest HNWI market position, after being surpassed by Asia-Pacific last year.

9.4%

7.5%

4.4%

9.9% 8.1%

Growth 2012

9.2%

CAGR 2007-12

2.5%

5.6%

2.2%

4.7%

5.7% 4.3%

3.5%

Total 8.6 m

Total 10.0 m

Europe

North America

Asia-Pacific

Latin America Middle East Africa Total 10.9 m

Total 11.0 m

Total 10.1 m

Total 12.0 m Global

Source: Capgemini Lorenz Curve Analysis, 2013

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The largest country based HNWI Populations did not change significantly in 2012

More than half the global population of HNWIs continued to be concentrated in the three countries – US,  Japan,  and  Germany  …  and  has  been  for  years,  only  slowly  eroding  regarding  market  share.

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Global HNWI wealth broke through the period of relatively flat growth post-crisis with 10% growth to reach a new high in 2012

HNWI Investable Wealth by Region

Global HNWI wealth is forecasted to grow at an annual rate of 6.5% over 2012 to 2015, surpassing $55 trillion.

Europe

North America

Asia-Pacific

Latin America

Middle East Africa

11.7%

12.2%

8.2%

6.7%

11.5% 8.6%

Growth 2012

Global 10.0%

Total 42.7 T Total 42.0 T Total 46.2 T

Total 55.8 T

6.5% Annualized

Growth

Total 32.8 T

Total 39.0 T Total 40.7 T

5.7%

9.8%

6.2%

3.1%

3.4% 6.8%

CAGR 2012–2015F

6.5%

Source: Capgemini Lorenz Curve Analysis, 2013

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The 2012 composition of Global HNWI Population by Wealth Bands  shows  (again)  the  ‘extreme’  nature  of  wealth  distribution

The 1% Ultra HNWI control 35% of all HNWI wealth – this wealth pyramid is globally divers and most extreme in Latin America where 1/3th of the Ultra HNWI population are domiciled

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Belgium HNWI population grew 7.4% in 2012 in line with European average

Note: HNWI numbers have been rounded up to one decimal place for representation while the change is calculated based on complete numbers

Drivers of Wealth (+) MSCI Belgium equity country index grew by 36.1% in 2012

as compared to the decline of 12.6% in 2011 National savings as a percentage of GDP increased to

25.3% in 2012 ECB extended its support to the banking system in the form

of long term refinancing operations

Inhibitors of Wealth (-) Real GDP declined by 0.2% in 2012 Fiscal deficit for 2011 was 3.9% of GDP (well above the government’s  target  of  3.6%  of  GDP):

• It is expected to have missed its target in 2012 as well Trade deficit remained large at US$9.6bn in 2012

Number  of  HNWIs  for  Belgium  (‘000),  2011–2012

Change (2011–’12)

7.4%

Source: Capgemini Analysis, 2013; Capgemini Lorenz curve methodology; EIU Country Reports, February 2013; EIU Data, March 2013; Global Property Guide, March 2013

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Key Macroeconomic Drivers and Inhibitors of HNWI Wealth

Factor 2012 Performance 2012 Drivers and Inhibitors Model Impact

GDP Growth

Real GDP Growth: • (0.2%) in 2012 • 1.8% in 2011

Marginal decline in GDP: • Real GDP stood at $407.7 billion representing an marginal decline of 0.2% in

2012 • It is forecasted to continue to contract mildly in 2013, but GDP growth should

recover and average about 1.7% per year in 2014-17

Savings

National Savings as a Percentage of GDP: • 25.3% in 2012 • 25.1% in 2011

National savings as a percentage of GDP increased marginally in 2012: • Private consumption stood at $211.0 billion, representing a marginal decline

of 0.6% in 2012 compared to growth of 0.2% in 2011 • Government consumption stood at $93.7 billion, representing a real increase

of 0.1% in 2012 compared to growth of 0.9% in 2011

Benchmark Index Growth

MSCI Country Index Growth: • 36.1% in 2012 • (12.6%) in 2011

After a slump of 12.6% in 2011, MSCI Belgium equity country index grew by 36.1% in 2012: • Most of the NYSE Euronext’s (Europe) blue chip indices demonstrated a solid

performance in 2012 • Belgian BEL 20 Index gained 18.8% with the biotechnology sector being one

of the top performing sectors

Real Estate

Real Estate price change: • 3.0% in 2012a • 4.7% in 2011

Prices for residential housing in Belgium have shown signs of slowing down after a sustained increase since the mid 1980s, due to the onset of the global financial crisis

As a result of tighter lending conditions and less supportive tax policies, Belgium real estate market has demonstrated decelerated growth in 2012

a Y-o-Y change from Q1 2011 and Q1 2012 B Average price of houses; Statistics Belgium Note: National savings = Real GDP – Total Real Consumption (Government + Private) Source: Capgemini Analysis, 2013; EIU Country Reports, February 2013; EIU Data, March 2013; Global Property Guide, March 2013

Belgium – 2012 Economic Review

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Belgium – 2012 Economic Review

Other Key Drivers and Inhibitors of HNWI Wealth

Factor 2012 Drivers and Inhibitors

Monetary Policy

The European Central Bank (ECB) cut its main refinancing rate from 1% to 0.75% in July 2012 ECB has continually extended its support to the banking system all over 2012, notably through two longer-term

refinancing operations (LTROs) that offered unlimited, cheap three year loans totaling just over €1trn Average  euro  zone  inflation  has  remained  above  its  official  target  of  “close  to  but  below  2%”  since  late  2010,  

mainly owing to higher global commodity prices and indirect tax increases, but eased to 2% in January

Fiscal Policy

Belgium overshot its budget deficit target in 2011 and is estimated to have done so again in 2012 The target agreed by the coalition partners in the 2012 austerity budget is likely to be missed, mainly because of

disappointing revenue growth stemming from weak economic performance The deficit is expected to narrow to below 3% of GDP in 2013 and the government has taken measures in the

form of tax rises and spending cuts to meet this target in 2013

Other Factors

Current-account deficit, which stood at 1.2% of GDP in 2012, is expected to narrow to 0.6% of GDP by 2017 Merchandise trade deficit remained large at US$9.6bn in 2012 as external demand growth slackened owing to fiscal  consolidation  in  Belgium’s  main  trading  partners

Gross fixed investment is estimated to have declined by 0.5% in 2012 because of waning investor confidence and is expected to continue falling in 2013

Source: Capgemini Analysis, 2013; EIU Country Reports, February 2013; EIU Data, March 2013; Global Property Guide, March 2013

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Findings from the Global HNW

Insights Survey

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Inaugural Global HNWI Insights surveyed over 4,400 HNWIs across 21 countries

Record wealth levels were achieved despite cautious HNWI investing approach in 2012. Focus  has  been  on  wealth  preservation  with  HNWI’s  seeking  safety  by  placing   ~30% of assets in cash and deposits.

HNWIs had high confidence in wealth managers and ability to generate wealth despite low confidence in markets

Preference for a single point of advice and service is strong. HNWIs have a strong preference to interact with a single wealth management firm, as well as one point of contact within that firm.

Demand for digital channels is robust globally, especially for HNWIs below 40 years of age.  As  comfort  levels  with  digital  channels  increase,  it  is  a  question  of  ‘when’  and  not  ‘if’  delivering a quality digital experience will become a critical component of the relationship and service delivery.

Key Findings – Global HNWI Preferences

Source: Capgemini, RBC Wealth Management, and Scorpio Partnership Global HNW Insights Survey 2013

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a. Includes structured products, hedge funds, derivatives, foreign currency, commodities, private equity b. Excludes Primary Residence

In 2012, HNWIs were conservative, with ~30% of their financial wealth allocated to cash and deposits

HNWI Asset Allocation

Equities

Fixed Income

Cash / Deposits

Real Estateb

Alternative Investmentsa

Asia-Pacific

Source: Capgemini, RBC Wealth Management, and Scorpio Partnership Global HNW Insights Survey 2013

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Strong HNWI trust and confidence in wealth managers and firms, but lower trust in markets and regulators

Note: Chart number do not add up to 100% as the medium trust values (neither high neither low) lying between somewhat low and somewhat high has not been shown here The  responses  to  the  question  asked  ‘Currently,  to  what  extent  do  you  agree  or  disagree  with  the  statement  that  I  have  trust  and  confidence  in  the  following  stakeholders?“  were  

analyzed based on agreement and disagreement to arrive at the percentages for High and Low HNWI trust and confidence

Despite low confidence in markets, HNWIs are confident in their own ability to generate wealth.

HNWI Trust and Confidence in Key Stakeholders Change in Trust, (YoY, % Points)

Primary HNWI Relationships

Industry Infrastructure

Wealth Manager

Financial Markets

Regulatory Bodies &

Institutions

Wealth Management

Firm

4.2

3.5

1.5

3.1

Somewhat Low Low Very Low Very High High Somewhat High

Source: Capgemini, RBC Wealth Management, and Scorpio Partnership Global HNW Insights Survey 2013

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Inaugural HNW Insights Survey confirmed some traditional HNWI views, and exposed new preferences

Wealth Preservation

Single Firm

Single Touch-Point

Direct Contact

Real-Time/Anytime Reporting

Wealth Growth

Multiple Firms

Multiple Experts

Digital Contact

Scheduled Reporting

Select Strong HNWI Behavior and Preferences

Note: The numbers above represent only strong preferences and responses with no strong preferences have not been shown here Source: Capgemini, RBC Wealth Management, and Scorpio Partnership Global HNW Insights Survey 2013

Thank You!

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