Wealthy Australians looking for simple advice

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Australia’s High Net Worth Individual (HNWI) population is growing fast, and it’s good news for advisers that know how to service them.

According to a recent study published by Capgemini and RBC Wealth Management titled Asia-Pacific Wealth Report, Australia saw its HNWI population grow by 15.1% in 2012. However, the report notes that trust is fundamental to the wealth management industry.

“HNWIs who lack trust may invest more of their wealth into their businesses or real estate, or allocate higher levels to cash. They may distribute their wealth among a number of firms or seek second opinions, restricting the ability of wealth managers to view and manage client wealth holistically and provide sound advice.”

Although the Asia-Pacific region showed high levels of trust in the industry, Australia was closer to the averages in the rest of the world. HNWIs here had slightly lower confidence than the rest of the world (mid-60%) for individual wealth managers and firms, but at close to 45%, they had slightly higher confidence than the rest of the world (approximately 40%) in industry infrastructure.

In contrast to other Asia-Pacific countries, Aussies see their financial needs as relatively straightforward, particularly in the higher age and wealth bands. They said their needs included the management of cash, credit, and growing investments.

Aussie HNW clients showed that they were more focused on wealth growth rather than wealth preservation, with much more risky asset allocations. This included the highest allocation to real estate, at 40.6% of assets.

Other stark differences between Australia and its Asia-Pacific counterparts were:

  • Australians prefer a single touch point over multiple experts
  • They would rather direct contact over digital contact
  • Australians showed a preference for real-time reporting
  • @SMSFCoach on 2/10/2013 3:00:00 PM

    Yet again we see the focus on the investment advice rather than the structure and strategy. Australian's need to focus on using the wealth system to get the money in the right entities and right tax environments first and the product should be the last thing considered.

    This is why advice is underrated by those who do not use an adviser currently. They only focus on returns not net after tax figures or having the money in the right place/name for long term planning.

    Hence you get the complaint from people with 3 investment properties worth over $1m but only earning 4% that they should be entitled to Centrelink assistance because their income is low. If they had looked at there portfolio as long term strategy they could have structured their investments to access better income and more benefits not just upfront tax deductions.

  • Rosemary Johnston on 3/10/2013 10:29:21 AM

    I like your comments @SMSFCoach. Advice needs to be a full consideration of all assets and life style requirements for the acquisition, holding and exit phases of a strategy. Too many assume they are self directed and take steps for the long term without long term considerations.

WP forum is the place for positive industry interaction and welcomes your professional and informed opinion.

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