Advisers gaining favour with HNWs
Financial advisers are gaining increasing favour with Australia’s high net worth (HNW) investors who may be prepared to back their own judgement but now appear more than willing to accept a second opinion provided by an adviser.
The latest Investment Trends High Net Worth Investor Report, released this week, reveals that in the past 12 months there has been a positive shift in perceptions of financial advisers.
“The last 12 months saw a large shift in the perceptions of advice among HNW investors, with a sharp increase in ‘validators’ who are open to receiving financial advice (56%, up from 40% in 2019) and a corresponding fall in ‘self-directed’ HNWs who prefer making decisions on their own (34%, down from 49%),” according to Investment Trends associate research director, King Loong Choi.
The Investment Trends report, now in its thirteenth year, showed that there were 485,000 HNW investors as at September 2020 – a figure similar to 2019 (490,000) but still significantly larger than 2018 levels (460,000).
“The size of the Australian HNW population remains resilient despite tough market conditions at home and abroad. While the uncertain investing climate had minimal impact on market size, it has profoundly impacted the attitudes and preferences of HNW investors towards investing and advice,” Choi said.
“The last 12 months saw a large shift in the perceptions of advice among HNW investors, with a sharp increase in ‘validators’ who are open to receiving financial advice (56%, up from 40% in 2019) and a corresponding fall in ‘self-directed’ HNWs who prefer making decisions on their own (34%, down from 49%),” said Choi.
The positive shift in attitudes towards advice providers, however, has not led to greater uptake. Over the last 12 months, the use of financial planners (19%) full-service stockbrokers (15%), wealth managers (7%) and private banks (5%) has largely remained static.
“The disjoint between the positive views towards advice providers and the current muted uptake of advice highlights how advice providers need to rethink their value proposition and delivery model,” said Choi.
Recommended for you
With the highest number of candidates in a year sitting the latest financial advice exam, a surge of new entrants are expected in the coming weeks, according to Wealth Data.
AMP has launched a range of five diversified index managed portfolios on its North investment platform, targeting a younger client demographic.
An NSW adviser, who advised over 120 clients after falsifying her financial advice exam results, has been permanently banned by ASIC.
ASIC has released the results from the latest financial adviser exam, the first to be run since changes to its structure earlier this year.
