Australian UHNWIs more optimistic than global peers
Almost two-thirds of Australian ultra high-net worth individuals are expecting their wealth to rise this year despite rising inflation and interest rates, significantly higher than the global average.
Research by Knight Frank's Wealth Report surveyed more than 500 private bankers, wealth advisers, intermediaries and family offices who between them managed over US$2.5 trillion of wealth for UHNWI clients.
Some 65% expected their wealth to rise, 29% expected it to stay the same and just 6% thought it would decrease.
This figure was higher than the global average with 86% globally expecting wealth to remain the same or increase compared to 94% in Australia.
Knight Frank chief executive, James Patterson, said: “Australia is considered a safehaven to growth wealth and we tend to be more shielded from global economic factors than other countries around the world, which goes a long way to explaining why Australian UHNWIs are more optimistic about wealth creation this year than their global counterparts”.
Their expectations were based on past performance with 71% of Australian UHNWIs indicating their wealth had increased in 2022 compared to 40% globally.
This was the result of allocations to residential and commercial property which was cited as the number one driver of wealth performance in 2022.
Knight Frank head of residential research, Michelle Ciesielski, said: “Property is a perceived inflation hedge and is seen as a safe and secure investment in times of uncertainty, as well as offering diversification benefits.
“Alongside real estate, the other top three drivers of performance in 2022 were currency trades, market timing and the return of cash, for the first time in more than a decade.”
However, Australian UHNWIs were more worried than their global peers about the impact of rising inflation at 94% compared to 80% globally and it was cited as the top risk for 2023 followed by interest rates.
AUTHOR
Laura Dew
Recommended for you
With the final tally for FY25 now confirmed, how many advisers left during the financial year and how does it compare to the previous year?
HUB24 has appointed Matt Willis from Vanguard as an executive general manager of platform growth to strengthen the platform’s relationships with industry stakeholders.
Investment manager Drummond Capital Partners has announced a raft of adviser-focused updates, including a practice growth division, relaunched manager research capabilities, and a passive model portfolio suite.
When it comes to M&A activity, the share of financial buyers such as private equity firms in Australia fell from 67 per cent to 12 per cent in the last financial year.
