The demand for financial planning advice among high net worth individuals (HNWI) has climbed substantially in the past year with nearly 35 per cent of HNWIs now seeking professional investment advice according to research conducted by Capgemini and RBC Wealth Management.
The Asia-Pacific Wealth Report 2014, compiled by the two groups and released late last week, stated that the preference for professional advice among HNWIs "was strongly prevalent in Australia" and that 34.9 per cent sought professional advice, up from 24.6 per cent in 2013.
Of this group around 40 per cent choose to work with a single advice provider while around 19 per cent consulted multiple advisers or experts while around 27 per cent were willing to pay for specialised advice and services with 23 per cent content with standardized advisory services.
The research behind the report was conducted in the Asia-Pacific region during January and February of this year and found that the HNWI market sector, that is those with more than US$1 million of investable assets outside of residential home, had grown by 5.8 per cent to 219,000 people while their wealth grew by 7.7 per cent to $765 billion.
Home bias remained strong among the HNWI sector with 64.6 per cent of investments held within the Asia-Pacific (ex Japan) region. The report did not break down investments inside of the Asia-Pacific region making it difficult to gauge the level of investment in the Australian market compared with Asian markets.
However investments into Europe by the HNWI sector were around 12 per cent, into Africa and the Middle East at 6.4 per cent, the Americas at 11.9 per cent and Japan at 4.9 per cent.
Australian HNWIs had the highest level of real estate investments in the Asia-Pacific region allocating 33.1 per cent of their portfolio, almost twice the global average of 18.7 per cent, followed by cash at 22.7 per cent and equities 22.3 per cent with fixed income at 11.4 per cent of their allocations and alternative assets at 10.5 per cent.
