In the latest chapter in the Global Wealth Report, the authors found that wealth management companies are the primary drivers of wealth inequality, with the global average for the share of total wealth held by the top 1% rising to nearly 30% in 2020 from 20.7% in 2016.
The report notes that the wealth management industry is a key driver of wealth disparity because it creates opportunities for companies to acquire and retain a significant portion of the total wealth of a country.
“Worries about rising inequality are a powerful driver of the growth of wealth management firms,” the authors say.
“Many countries around the world have been struggling with rising wealth inequality for decades.
In the developed world, rising inequality has been linked to the financial crisis, as has stagnant wages and stagnating incomes for many middle-class people.
This has forced governments to make tough choices about their growth strategies, while also raising the stakes of global financial instability.
In response, a growing number of wealthy countries have begun to rethink their strategies and take bold steps to address inequality.”
The report found that the US is the most unequal nation, with an average wealth for a median US household of $2,700.
It notes that median wealth for households earning $100,000 is $6,000 lower in the US than in the UK, Australia and New Zealand.
“The wealth gap between the US and other rich countries has widened since 2010, with median wealth in the richest 10% of households having risen to $13,000 in 2020, and the median wealth of households earning less than $20,000 rising from $2.2 million to $6.2 billion,” the report states.
“These are some of the richest households in the world, and yet we see very little change in their wealth in real terms.”
The authors also note that the UK is the least unequal country, with a median wealth level of $4,200 in 2020 compared to $17,500 in the United States.
However, median wealth levels for UK households are still higher than those in the other wealthy countries.
The authors suggest that the current political climate in the country has led to a “distressed” state of the economy.
“A growing number are now concerned about rising wealth inequalities and their impact on economic activity,” they write.
“This is particularly the case in the wake of the election of Donald Trump, who is perceived as the most hostile to the wealthy in American politics.”
The US has the largest share of the world’s population but has the highest wealth inequality and poverty rates, with 3.1 million Americans living in poverty in 2020.
It has been noted that the gap between rich and poor in the USA has widened dramatically over the past three decades, and is now the highest in the OECD.