Opaque Affluence

Hard-To-Find Millionaires

Elegantly dressed women watching horse racing at Ascot racecourse in Berkshire source Britain On View Getty Images 61668215
Rich or super rich?
  • Why it matters

    Why it matters

    Precise and accurate information about such things as the number of super-rich people and their holdings now and in the past can provide valuable insights about economies.

  • Facts


    • Last year, consulting firm PwC and Swiss bank USB issued a report that said the world had 289 billionaires in 1995. In 2015, the number had dropped to 126.
    • A new study by Boston Consulting Group says global households’ private wealth rose by 5.2 percent to $168 trillion (€150 trillion) in 2015.
    • BCG has calculated that in 2014, 679 individuals in Germany had private assets of more than $100 million each.
  • Audio


  • Pdf

It makes quite a splash whenever a consulting firm, bank or asset-management company publishes details about the world’s super-rich.

For example, a new study by Boston Consulting Group calculates that private households owned $168 trillion (€150 trillion) in 2015, up 5.2 percent compared with a year earlier.

In Germany, the top 1.1 percent of the population, or 900,000 citizens, owned 27.6 percent of the private assets in the country last year. By 2020, that wealthy group of German people is expected to grow to 1.6 percent of the population and will own 31.5 percent of private assets.

Many studies about the ultra-wealthy make for juicy stories and headlines but are based on pseudo-precise data.

“All studies are rough estimates; no one knows the precise figure.”

Thomas Bauer, Vice-president, Rhine-Westphalia Institute for Economic Research

Last year, consulting firm PwC and Swiss bank UBS issued a report regarding the world’s super-rich: In 1995, the world had 289 billionaires. Twenty years later, the number of billionaires had dropped to 126.

BCG has calculated that in 2014, 679 individuals in Germany had private assets of more than $100 million each. In the United States, the number of people with that level of assets was 5,201. In China, the number was 1,037.

The precision of such wealth studies is suspect because the number of millionaires and billionaires cannot be determined exactly.

That’s particularly applicable in Germany, where money and personal assets is one of the most taboo topics, often not even spoken about within families. The country releases no official statistics regarding wealth.

Is this an explanation why, in its current Global Wealth Report 2016, BCG no longer names any absolute number of millionaires? The consulting firm says there is no reason for this; the focus will now be directed more toward growth in general.

Thomas Bauer, professor for empirical economic research and the vice-president of the Rhine-Westphalia Institute for Economic Research, has difficulty believing that exactly 679 of the super-rich lived in Germany in 2014: “All studies are rough estimates; no one knows the precise figure,” he said.

He illustrated this with regard to the super-rich in China: “Are there 1,000, 5,000 or 15,000? This is the range of our discussion, because it can only be a matter of estimates.”

Mr. Bauer points out that often only assets such as stocks or cash investments are taken into consideration; tangible assets and debts tend to be neglected. This is confirmed by an inspection of the methodology of the BCG study from 2015. Only bankable assets are registered; this includes money in various accounts and stock holdings. No attention is paid to the value of real estate, private ownership of companies, art collections and long-lasting luxury goods.

So it’s not unlikely that some proprietary families of the many small and mid-sized companies with leading global brands are not even registered, or are “only” included in the category of the moderately rich who have assets of up to $100 million.

“It could be that the lower segment includes people who, because of their real estate holdings, pension funds or private equity funds, would move into other categories in our listing,” said Daniel Kessler, managing partner of BCG in Switzerland.

In Germany, however, that’s not the only problem, because a meager amount of data is available. In many countries, detailed statistics exist about income and asset distribution, for example from tax information. BCG takes this data from other countries and adjusts it.

But this sort of income-tax data isn’t available in Germany. Researchers basically have two possibilities for determining asset distribution: They can pull data out of wide-ranging surveys such as the Socio-Economic Panel, a survey of some 30,000 individuals in nearly 11,000 households that has been regularly conducted for about 30 years. Or researchers can make guesses about monetary assets. Particularly for top money earners, the Socio-Economic Panel’s estimates are burdened with “severe mistakes,” Mr. Bauer said.

So how did BCG come up with the figure of 679 super-rich Germans? The consulting group’s Mr. Kesser gave this explanation: “For countries where income distribution is less well-documented, we take the distribution in comparable countries as a basis. For Germany, we determine the number of super-rich at the upper end of the scale on the basis of already-existing sources of data.”

Such sources for overall wealth can also be lists of rich people that appear in magazines. But these lists also aren’t based on surveys of the super-rich that would provide precise data.

This doesn’t seem to be a great problem for organizations that issue studies about wealthy people. The consultants says their investigations have a different purpose.

“Banks have to know how assets are distributed in their target markets and what the cultural preferences are there,” said BCG’s Mr. Kessler.

After all, the business with wealthy private customers is one of the few sectors where good money can still be made.


Stefani Hergert reports on education and other topics for Handelsblatt. To contact the author: hergert@handelsblatt.com

We hope you enjoyed this article

Make sure to sign up for our free newsletters too!