Latest research confirms strengths in market access and innovation, while concerns appear about productivity growth, personal savings
MINNEAPOLIS (December 16, 2019) – A new index based on research from The Economist Intelligence Unit (EIU), completed for RBC Wealth Management, has rated the United States as the top overall market for creating wealth opportunities. The index, which weighted data from 15 countries across four pillars – economic fundamentals, market dynamics, innovation and risk – placed China a close second, with Singapore, India and Hong Kong rounding out the top five.
The study’s results reveal several key contrasts and takeaways for the future of American wealth creation and for the wealth management industry. The United States placed top in a number of important subcategories, including wealth creation opportunities in market capitalization, access to finance, and business dynamism. It also ranked near-best in several others, including commitment to innovation, as measured by R&D spending; and innovation effectiveness, as measured by patent applications per head (tied for 2nd).
In other areas, however, the index painted a more mixed picture. Digging into economic fundamentals, for example, the U.S. ranked second-to-last in consumer savings as a percentage of gross domestic product (GDP), edging only the United Kingdom. America generally scored very well across most innovation metrics, but notably lagged well behind on measures of productivity growth, trailing the Asian economies and even several from continental Europe. Similarly, while the U.S. presents a generally low-risk environment for wealth generation, its more moderate score for political risk had it tied for seventh place.
“This new index proves that strong wealth opportunity isn’t just an individual endeavor, but depends on macro conditions in the economy, whether that’s a strong environment for entrepreneurship and continued economic growth, or properly managed structural risks and population change,” said Angie O’Leary, Head of Wealth Planning at RBC Wealth Management – U.S. “While the United States remains at the top, it is also clear that other economies – especially in Asia – are making a hard charge for that spot, ensuring healthy global competition, impetus for shoring up current weaknesses, and developing new sources of wealth going forward.”
The EIU research follows 2018’s survey of women and their views on wealth, as well as a separate study of high net-worth individuals (HNWIs) in the U.S. completed earlier this year. That survey of over 1,000 HNW respondents noted similar concerns reflected in the Wealth Opportunity Index, specifically noting the rising cost of living and healthcare expenses as challenges to further wealth creation and wealth preservation in today’s economy. Still, an accounting of HNW market sizing recently undertaken by RBC Wealth Management estimated that the U.S. will continue to have the highest number of wealthy people through 2030, with China in second – and also fastest growing.
About RBC Wealth Management – U.S.
In the United States, RBC Wealth Management operates as a division of RBC Capital Markets, LLC. Founded in 1909, RBC Capital Markets, LLC. is a member of the New York Stock Exchange, the Financial Industry Regulatory Authority, the Securities Investor Protection Corporation, and other major securities exchanges. RBC Wealth Management has $389 billion in total client assets with more than 1,900 financial advisors operating in approximately 170 locations in 42 states.
Jade Faugno, Lansons Intermarket, 212-754-5425, or Jfaugno@intermarket.com