HNW advice take-up plummets: report

Financial advice use among Australia’s high-net-worth investors has fallen to a five-year low, according to new data from Investment Trends.

The company’s 2017 High Net Worth Investor Report found the percentage of high-net-worth investors (HNWs) using financial advice has fallen to 68 per cent, a five-year low and down from its 2013 high of 74 per cent.

Despite this, HNWs still present a “significant opportunity” for advisers, the research found, with 53 per cent of HNWs reporting that they have “unmet advice needs”.

“Right now, HNW investors have a range of unmet advice needs that most often centre around investment strategy and retirement,” said Investment Trends senior analyst King Loong Choi.

The research found that HNWs “understand that a single adviser may not necessarily possess the expertise to meet all their advice needs”, and that only 31 per cent believed it was important for an adviser to provide an “all-encompassing service”.

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

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HNW numbers have also grown for the first time since 2014, according to the report, with more than 435,000 Australian investors having over $1 million in investible assets outside of their home, business and non-SMSF superannuation.

The estimated volume of investible assets controlled by the HNW population has also grown, up 12 per cent to $1.7 trillion in the last 12 months, the report said.

“The growth in investable assets controlled by HNWs was led by those in the higher wealth brackets,” said Mr Choi.

“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 market over the last year.”

The group’s total cash holdings is estimated to be around $290 billion, of which $100 billion is considered “excess cash” typically earmarked for growth assets.

“Almost all HNW investors say they expect to face investment-related challenges in the coming year, and this uncertainty has led to a large build-up of cash holdings,” Mr Choi said.

HNW advice take-up plummets: report
Investment Trends, King Loong Choi, High net worth, HNW, HNW investor, investable assets, funds under advice, unmet advice needs,
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