Despite an 11.5 per cent increase in global wealth last year to a near-record $111.5 trillion, wealth management revenues fell by an average of 7.3 per cent, BCG's tenth annual Global Wealth report, Regaining Lost Ground: Resurgent Markets and New Opportunities, said.

The report comes out about two weeks before Merrill Lynch and Capgemini are due to release their annual world wealth report , which may also confirm that wealth holdings rose last year.

The survey of 114 wealth-management institutions worldwide found that revenues fell despite the fact that assets under management of the firms surveyed increased by an average of 14.3 per cent.

Average revenue margin, measured by return on assets, fell by 12 basis points to 83 basis points, according to the report.

And the average profitability of participants in the survey fell 22 basis points in 2009 from 27 basis points in 2008.

Fewer transactions, tougher price negotiations, and a migration of assets to lower-margin products, all contributed to the decline in wealth managers’ performance, according to the study.

"Investors have started moving assets out of safe havens, but they still have a lot of wealth parked in basic, low-margin products," said Anna Zakrzewski, a BCG principal and a co-author of the report. "Their asset allocations tend to be more conservative than their actual risk profiles. In addition, the use of discretionary mandates is down, as investors remain wary of signing over control of their wealth."

Pressures on growth and profitability will continue, according to the report.

Wealth managers need to “improve their revenue margins and risk-management functions while making a concerted effort to attract and retain investors,” the report said.

Wealth Rebound

The report also underscored how much global wealth rebounded, and how much is out there.

North America posted the largest absolute gain in wealth at $4.6 trillion , but the largest percentage gain, and the second largest in absolute terms, occurred in Asia-Pacific , where wealth increased by 22 per cent, or $3.1 trillion - nearly double the global rate.

Latin America had the second-highest growth rate at 16 per cent, while Europe remained the wealthiest region with $37.1 trillion in assets under management, or one-third of the world's wealth.

Global wealth  is projected to grow at an average annual rate of nearly 6 per cent from year-end 2009 through 2014, the report stated, much slower than the sharp recovery in 2009 but still higher than the 4.8 per cent annual growth rate from year-end 2004 through 2009.

"There's no doubt that wealth will continue to grow faster in emerging markets, fueled by strong economic growth," said Tjun Tang, a BCG partner and a co-author of the report. "We expect Asia-Pacific, excluding Japan, to grow at nearly twice the global rate, raising its share of global wealth from 15 per cent in 2009 to almost 20 per cent in 2014."

Wealth became slightly more concentrated as it grew, the study showed.

Fewer than 1 per cent of all households were millionaires, but they owned about 38 per cent of the world's wealth, up from about 36 per cent in 2008.

The number of millionaire households rose by about 14 per cent in 2009, to 11.2 million, about where it stood at the end of 2007.

The US had the most millionaire households followed by Japan, China, the UK and Germany.

Singapore saw the highest growth in millionaire households, up 35 per cent, followed by 33 per cent for Malaysia, 32 per cent for Slovakia, and 31 per cent for China.

Switzerland had the highest concentration of millionaire households in Europe and the third-highest overall at 8.4 per cent, and three of the six densest millionaire populations were in the Middle East countries of Kuwait, Qatar, and the United Arab Emirates.