HNW Aussies holding more local equities
Australian equities are the most popular asset class for high net wealth (HNW) Australians, jumping 17% from three years ago, according to research.
Polling Australians with at least $1 million in investable assets, Crestone Wealth Management’s ‘State of Wealth’ report showed cash (72.4%), Australian equities (73.4%), and residential property (43.4%) were the top three investment choices for HNW clients.
The research showed a bias toward local investment following COVID-19 with the portion intending to reduce international exposure jumping from 15.1% in 2019 to 18.3% in 2020 and 34.7% in 2021.
Though that mostly came from younger individuals as older high-net-worth individuals were less interested in changing investment portfolios.
Over half (52.2%) of generation Y were intent on reducing international exposure compared to 37.2% of generation X and only 9.8% of baby boomers.
Crestone’s head of strategy and development, Clark Morgan, said the research provided a vital snapshot of high-net-worth and ultra-high-net-worth investor mindsets pre-pandemic to 2021.
“While their top three asset classes have not changed, we have seen a trend towards more diversification,” he said.
“That’s potentially driven by an increased uptake in financial advice among wealthy Australians.”
Morgan said it was wrong to assume the majority achieved their wealth by taking risks as most remained wealthy by being relatively cautious.
“But they still rely on what’s familiar,” Morgan said.
“Arguably their portfolios are still not as diversified as one would like, with still a strong reliance on cash, Australian equities, and residential property, but it is trending positively in correlation with further engagement with financial advisers.”
Recommended for you
It can be extremely hard to realise the gains from financial advice M&A, according to Peloton Partners’ Rob Jones, and more could be gained from firms looking inward at their own practice.
With platforms reporting their quarterly results, there is a clear divide in the adviser markets they are targeting, according to platform specialist Recep Peker, and which would be right for your clients.
The Federal Court has imposed a $10 million penalty on Macquarie Bank for failing to prevent and control unauthorised fee transactions by third parties including financial advisers.
A financial advice firm has seen a weekly decline of 10 advisers, with all moving to a new licensee, while Centrepoint Alliance continues its “growth story”.
