HNWs turn away from planners

15-Dec-2017

By Sarah Kendell

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Australia’s wealthy investors are growing in number but are seeking less advice from financial planners, according to new research from Investment Trends.

The group’s 2017 High Net Worth Investor Report revealed that the number of Australians with more than $1 million in investable assets outside their home, business or superannuation had increased by 2 per cent over the past 12 months, and that the total number of assets controlled by high net worth (HNW) investors had also risen by 12 per cent over the same period.

Investment Trends senior analyst King Loong Choi said the results of the report indicated both an increase in the number of HNW investors, and rising incomes among those who were already wealthy.
“The growth in investable assets controlled by HNWs was led by those in the higher wealth brackets,” he said.

“These investors – who predominantly draw their wealth from business profits, share investments and property investments – have benefited immensely from the strong performance of both the Australian share market and property markets over the last year.”

At the same time, usage of financial advisers among HNW investors had decreased, with 68 per cent of this group having engaged an adviser compared to 74 per cent four years ago.

However Choi pointed out that as 53 per cent of HNW investors mentioned that they had unmet advice needs, there was an opportunity for financial planners to improve their penetration in this market.

“Right now HNW investors have a range of unmet advice needs that most often centre around investment strategy and retirement,” he said.

This investor group was also open to seeking out multiple advisers for different practice areas, meaning that advice firms could tap into the HNW demographic by pursuing a holistic business model with several different specialists under one roof, Choi said.

“HNWs themselves understand that a single adviser may not necessarily possess the expertise to meet all their advice needs, with only 31 per cent believing it is important that one individual provides an all-encompassing service,” he said.

“Advice providers could therefore adopt and promote a team-based approach to more effectively service the HNW market.”

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