Rich Hoard Cash as Their Wealth Reaches Record High

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The amount of individuals that hold more than $30 million in assets has climbed to a new record in 2014, according to a global survey on Wednesday, which also warned that a lack of diversification meant that this wealth is not protected from shocks to the financial system.

12,040 of these new ultra high net worth (UHNW) individuals were minted in the year ending June 2014, said the Wealth-X and UBS World Ultra Wealth Report released on Wednesday. This meant a 6 percent increase from last year which pushed the global population of these millionaires to a record 211,275.

With the annual gross domestic product of the U.S. closing in on the $17 trillion mark, according to the World Bank, this means that the ultra-rich now have almost twice the wealth of the world's largest economy.

Nonetheless, Simon Smiles, chief investment officer at UBS Wealth Management, warned of the risks the wealthy few face.

"This report finds that UHNW individuals hold nearly 25 percent -- an extremely high proportion – of their net worth in cash," he said in Wednesday's accompanying press release.

Fearing that their millions are being eroded away with inflation, Smiles also said that holding government bonds from Germany and the U.S. is no longer safe. The return outlook for these fixed income assets is highly and negatively "asymmetric," he added.

"Wealth concentration is perhaps the biggest risk facing UHNW individuals," he said. "Individuals have over two thirds of their wealth in their core businesses."

The majority of the millionaires are self-made and are involved in founder-owned private businesses, according to the report. The value of these private company holdings represents almost twice the amount that they hold in public company stakes, it said.

Thus, this disproportionality exposes the rich to "exogenous shocks," according to Smiles, such as technological change, new regulations and fresh upheavals in the world of geopolitics.

The new report also predicted that the global UHNW population will reach 250,000 individuals in the next five years, an increase of 18 percent from this year's figures.

North America and Europe continue to dominate the survey with the United States maintaining its position as the world's top UHNW country with a total 69,560 of these individuals, it said. Asia will be the region that sees the fastest growth in UHNW wealth, it added.

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