By FERNANDO NOGUEIRA DA COSTA*
Having a university degree is no longer such a strong differentiator and professions that require more education are now facing greater competition.
Investors with assets above R$5 million, in less demanding banks, are in the class Consulting (PB), but private “big banks” require more than R$10 million. In this case, the class of investors known as traditional retail (VT) has less than R$1 million in business volume and high-income retail (VAR) is located between the two segments.
According to ANBIMA, in 2024, the total volume invested by individuals in these client segments reached R$7,3 trillion. This represented a growth of 12,6% compared to the previous year.
Specifically, the high-income retail segment recorded a larger increase of 15,4%, totaling R$2,57 trillion, while traditional retail grew 13,6%, above the average growth, reaching R$2,43 trillion. Together, these two segments totaled R$5 trillion, corresponding to 68,6% of the total invested by individuals. The PB segment, in turn, showed a smaller growth of 8,7%, reaching R$2,3 trillion, representing the remaining 31,5%.
Analyzing the evolution of these segments from the beginning of the time series in 2015 to the end ten years later, traditional retail multiplied its collective wealth by almost three times, from R$827 billion to R$2,427 trillion, and high-income retail multiplied it by 4,4 times, from R$586 billion to R$2,572 trillion. The multiplication of PB's wealth was just over three times.
Proportionally, the upper middle class became richer and now holds 35% of the total in 2024, compared to 28% in 2015. The lower and lower middle classes went from 39% to 33% and the rich from 34% to 31,4%, after having reached 40% and maintained the level of 39%-38% in the years of far-right populism.
When considering the number of accounts (not CPFs) by segment, the “financialization” appears in traditional retail, having gone from 66,6 million to 163 million, and in high-income retail, from 5 million to 15 million accounts in these ten years. The PB went from just 110 thousand accounts to 162 thousand, but this year ANBIMA began to disclose that this segment has 741.218 accounts, well above the 162.045 published as the “number of exclusive accounts” – it must be CPFs of the 65.692 family groups.
If this hypothesis is valid, there are almost five accounts per CPF, and extrapolating to high-income retail, there would be 3 million customers in this financial elite – then the per capita wealth would be R$170.000 x 5 or R$850. I came up with another hypothesis based on the Education figures from the 2010 Census: only 14,3% of the Brazilian population had a college degree, 0,7% had a master's degree and 0,5% had a doctorate, and among the richest 1%, 62,4% had a college degree, 9,3% had a master's degree and 5,1% had a doctorate. I assumed that in the high-income retail and PB segments, customers with a university degree predominated.
This education in Brazil was restricted to a cultural and economic elite until at least the 1990s. For much of the XNUMXth century, access to higher education was limited by factors such as the scarcity of public institutions, the high cost of private institutions and the low average level of education of the population.
Higher education was a privilege of higher income groups. They had greater access to quality basic and secondary education, in addition to being able to bear the costs associated with university education.
During the social-developmental governments of the early 21st century, there was a significant expansion of federal and state universities, with the creation of new campuses and inclusion programs, such as Reuni (Program to Support Plans for the Restructuring and Expansion of Federal Universities). The adoption of affirmative action policies, such as racial and social quotas, in addition to the reservation of places for students from public schools, expanded access for groups that were previously excluded.
Programs such as ProUni (University for All Program) and Fies (Student Financing Fund) allowed low-income students to enroll in private universities with vacant places, generating a significant increase in the number of enrollments. The private sector grew rapidly, especially with the popularization of distance learning (EAD). Due to its low cost, it made the pursuit of a higher education degree more accessible.
According to the 2023 PNADC, among people aged 25 or over, 19,7% had completed higher education. If we consider those aged 35 to 34, the highest percentage of 24,9% had this education, and those aged 65 or over had the lowest percentage: only 11,4% of this group had this education.
The widespread adoption of higher education has had a direct impact on the job market, especially on the salaries of graduates. As more people obtain degrees, competition for certain positions has increased, reducing the salary gap that previously existed between graduates and non-graduates.
Having a university degree (such as a “Uniesquina” type) is no longer a strong differentiator. Demanding professions that require more education have started to face greater competition, worsening average incomes.
The advance of innovation and digitalization in several areas has changed the demand for certain professionals with university degrees, allowing innovation to be adopted by groups with lower educational levels. The quality of higher education has become more heterogeneous, with some institutions offering excellent teaching producing highly competent professionals, while others have begun to offer courses of lesser prestige in the market, making employability more difficult.
Following the trend in advanced countries, university education in Brazil ceased to be an advantage for the elite at the turn of the 21st century, due to public policies of expansion and inclusion, as well as the growing participation of the private sector. This impact had positive effects on the democratization of knowledge, but it also created problems, such as the decline in the level of relevant teaching among graduates and the need for differentiation in the job market through postgraduate and specialization courses.
This information seems to be consistent with the hypothesis that the segment of high-income retail banking customers is correlated with the number of professionals who graduated from Brazilian universities in the last century, as they were able to save and make long-term investments, becoming millionaires, including in dollars. The segment of high-income retail banking customers includes those who managed to accumulate significant wealth throughout their professional lives.
This correlation occurs because, in the 20th century, access to higher education in Brazil was restricted to a cultural and economic elite. Those who managed to graduate, especially in areas such as medicine, engineering, law, and administration or economics, had high employability and higher incomes throughout life.
Professionals who graduated between the 1960s and 1990s had a significant salary advantage over the average population, allowing for greater savings and investment capacity. These professionals had access to diverse sources of income, in the public sector or in large private companies, ensuring consistent income and the possibility of investing in the long term.
During the period of high inflation in Brazil (until the Plano Real in 1994), those who had financial knowledge and access to inflation-protected investments (such as real estate, overnight and indexed securities) managed to preserve and increase their wealth. With the growth in the holding of public debt securities in the second half of the 1990s and, later, with the “macroeconomic tripod” with outrageous interest rates to attract sovereign risk instead of exchange rate risk, these professionals began to invest more in assets such as investment funds, private pension plans and term deposits – and less in stocks and real estate.
The financialization of the Brazilian economy in the current century has allowed for the expansion of investment options for those who already have some accumulated capital, facilitating the transition to higher wealth levels. Banks have developed segments such as Personnalité, Estilo, Prime and Van Gogh to personally serve clients with significant wealth, offering consultancy services.
Many of these clients are former professionals, former executives and former civil servants or retired civil servants. They have accumulated wealth over decades and are now part of these segments.
The correlation between university education, achieved in the 20th century, and the growth of the high-income retail segment in Brazilian banks seems to be strong, as these individuals had better opportunities for employment, income and investments. This allowed them to accumulate enough wealth to enter high-income segments and, in some cases, even the Consulting, depending on the level of equity achieved.
*Fernando Nogueira da Costa He is a full professor at the Institute of Economics at Unicamp. Author, among other books, of Brazil of banks (EDUSP). [https://amzn.to/4dvKtBb]
the earth is round there is thanks to our readers and supporters.
Help us keep this idea going.
CONTRIBUTE
