Advice key for tech investors: WealthInsight
Sourcing specialist advice will be critical for high net worth individuals (HNWIs) looking to successfully invest in the technology sector, research from WealthInsight reveals.
WealthInsight head, Oliver Williams, warned that while the tech sector has been a "powerful wealth generator" in recent times, the number of millionaires in the US making their money from the sector over the last three years has slowed down.
"Data that those earning their wealth from tech and telecoms are decreasing adds to fears of a tech bubble," he said.
"Just as the recent tech boom has created a wave of new entrepreneurs, the curbing of their ranks is reflective of the industry's slowing."
However, despite sector's slowdown in terms of the creation of new millionaires, Williams said the volume of existing HNWIs investing in the industry through venture capitalism was at an all time high.
"With few asset classes performing as well as tech start-ups in recent years, there has been pronounced interest from HNWIs of all stripes," he said.
"We found that only 11 per cent of HNW venture capitalists are themselves from the tech sector, most are from financial services.
"That means the majority of venture capitalists investing in tech lack the industry knowledge to mitigate any deflation of a tech bubble.
"Couple with the decline in tech IPOs providing an exit for venture capital investors, the sector is no longer looking as promising in 2016."
AUTHOR
Nicholas O'Donoghue
Recommended for you
ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager.
In the run-up to heavy losses expected at the end of the financial year, June has already reported consecutive weeks of adviser losses.
ASIC has banned a former NSW adviser from providing advice for 10 years for investing at least $14.8 million into a cryptocurrency-based scam.
ASIC has sent warning notices to social media finfluencers who it suspects are providing unlicensed financial advice to Australians as part of a global crackdown by international regulators.
