This year’s Global Wealth & Lifestyle Report revealed that the cost of a high-net-worth lifestyle fell on average 2 per cent in US dollars since 2024. We have not observed a drop in the index in recent years and it is particularly interesting as it may not feel that living well has become more affordable. For example, many countries are still tackling varying rates of inflation and slowing GDP growth, and several items in our index, such as flights and hospitality costs, have seen significant price increases. 

How are total wealth and financial attitudes changing?

Despite these pressures, spending remains high and for the HNWIs canvassed in our Lifestyle Survey, the overall value of assets they hold has, on average, increased again this year. The most significant increases in total value of assets were seen in the Middle East, while the greatest overall percentage rise in net worth was experienced by affluent Europeans. However, in Latin America, respondents recorded a higher level of significant decreases in their wealth than in other regions, showcasing the inevitable fluctuations of fortunes given the changeable macroeconomic background. 

We also see similar variation between regions when it comes to financial attitudes. In Europe and North America, for example, high-net-worth individuals (identified as those with over 1 million USD in investable assets), are more conservative in their approach to a broad range of financial topics. From portfolio construction and risk, to an interest in wealth education and sustainability, these two regions tend to be more conservative, with a higher focus on wealth preservation than in other parts of the world.

In addition to having a stronger focus on wealth preservation, the majority of respondents in these regions have not changed their level of risk, and around one in two have not changed the diversity and focus of their assets. 

Conversely, most HNWIs from APAC, the Middle East, and Latin America have increased the diversity of assets in their portfolio and a consistent proportion has increased their level of risk. Investors in these regions also tend to be more interested in investing in future trends or in line with their personal values. 

How are asset allocation decisions changing for wealthy individuals?

Intriguingly, the composition of investors’ portfolios also changed quite significantly over the course of the last year – something that may be noted further in next year’s survey given the tariff turmoil prompted by the US government after responses were analysed. While equities remain the most important asset in Latin America, APAC, and North America, it is real estate that emerges as the principal asset for both European and Middle Eastern HNWIs. Notable too are funds, which have seen a big increase in Europe and remain the second most popular asset class in North America.

We know from our survey that the majority of respondents globally were concerned about financial longevity and given growing geopolitical uncertainty and also increased lifespans, many are considering altering their asset allocation or investment strategy to enable them to continue living in the way they have become accustomed long into the future. This may also be one reason behind some of the changes we see in preferred asset classes and relative levels of risk taken.

But what exactly is asset allocation and why is it such an important element of investing? This is the process of dividing up your investment portfolio among different asset classes, such as bonds, equities, and alternative investments. It is a key step in your investment journey and, if done correctly, can help you to maintain the right balance between risk and reward based on your own financial goals, risk appetite, liabilities, as well as your investment horizon.

The strategic step in this process is building a targeted asset allocation that meets your specific needs – such as day to day or discretionary costs. This means that you should end up with a diversified portfolio and associated risk budget you can live with no matter what happens in the market; even in the case of an extreme shock triggering a temporary drawdown in the value of your portfolio. This can also apply to changeable lifestyle costs for goods and services such as those tracked in our Lifestyle Index. And always keep in mind: when markets are uncertain, your strategic allocation is your default investment position, not cash.

What does this mean for wealthy families?

So, what are we to glean from these changing behaviours and approaches? As market volatility and geopolitical conflicts look set to remain influencing factors on investment performance, wealthy individuals are tactically adjusting how they allocate their assets in order to try and protect their returns. In doing so they reveal the distinct societal or cultural preferences that diverge across the regions of the globe. And, despite an overall drop in the cost of living well this year, lifestyle and discretionary spending remains high among HNWIs, meaning smart investment decisions taken today, based on sound advice, analysis, and experience, will impact their ability to fund longer, healthier lives in the future.