Nearly half of wealth management clients in Australia and globally have indicated that they are seeking more advice across investment services, according to a new survey by EY.
The survey of more than 2,600 wealth management clients across 27 geographies found that 46 per cent of respondents in Australia were looking for more advice, compared to 56 per cent of those in the Asia- Pacific region and 48 per cent of those globally.
Thirty-seven per cent of Australian clients believed that managing their wealth had become more complex in the last two years and 64 per cent pointed to market volatility as a reason for their lack of financial preparedness.
“Given ongoing market volatility, investors have a lot of questions right now and they are hungry for advice,” commented Rita Da Silva, EY Oceania wealth and asset management leader.
“Continued market stress is amplifying their defensive stance and as well as their appetite for both switching and adding to their portfolio.”
The firm determined that the appetite to switch wealth management providers among Australian clients is currently at a high level, with 41 per cent planning to add a new provider, move money to another provider, or switch altogether during the next three years.
“The role of the wealth manager is crucial right now and will remain in the spotlight as they evaluate their risk models, provide sound advice, and take a proactive approach to the interwoven complexities that have evolved rapidly in the past few months,” said Ms Da Silva.
“This is in addition to addressing the current uncertainty around the outcomes of the independent Quality of Advice Review on their advice and business models.”
EY also said that it had observed a shift in the top financial goals of Australian investors over the past two years, with protecting wealth against losses and inflation ranking as the top priority in 2023 for 58 per cent of local respondents, compared to 38 per cent in 2021.
Ensuring adequate income dropped from the number one priority in 2021 (64 per cent) to number four in 2023 (27 per cent), behind growing investment returns (46 per cent) and wealth transition (28 per cent).
Ninety-seven per cent of Australians said that they change investment behaviour due to a decline in portfolio value. Forty-eight per cent reported that they had moved assets into active investments over the past two years, while 36 per cent had moved towards savings and deposits.
The survey also revealed that 51 per cent of Australian investors would seek additional financial advice and 73 per cent would review their financial plans in response to future volatility.
“There is an appetite among Australian investors for more advice and for finding new ways of accumulating and protecting their wealth. Interestingly, it seems that investors are increasing the breadth of what they consider advice and how they choose to consume it,” said Scott Glover, EY Oceania financial services strategy leader.
“This sentiment, coupled with thinking around new advice models stimulated through the Quality of Advice Review, suggests the time is ripe for wealth management participants to lean into opportunities to assist Australians to grow, protect, and enjoy their wealth beyond traditional concepts of financial advice.”
