HNW investors hold $3.4tn and 58% need more advice

Praemium, in conjunction with Investment Trends, has released its 2024 High Net Worth Investors report surveying more than 1,500 HNW investors.

These individuals are defined as those with at least $1 million in investable assets, with the research finding that Australia’s wealthiest segment continues to grow and has reached a new high in 2024.

Around 690,000 individuals are now classified as HNW, Praemium and Investment Trends found, representing an 8.7 per cent rise from 635,000 in 2023.

Collectively, these investors manage $3.4 trillion in investable assets, which is up from $2.98 trillion in the previous year.

The growing HNW segment, who are increasingly demanding specialist advice, indicates a clear opportunity for advisers looking to service a greater number of wealthier clients.

Despite this, the proportion of these investors with unmet advice needs has held steady at 58 per cent, though the report noted this pool of investors is “evolving”.

“The number of unadvised HNWs with unmet advice needs is growing, up 15 per cent to 300,000 investors, while the number of advised individuals with unmet advice needs has declined by 18 per cent, proving the benefit of advice,” it said.

Inheritance and estate planning was the leading unmet need for the third straight year, with 37 per cent of HNW investors citing this as an area they need support. Intergenerational advice (24 per cent of HNW investors) and aged care planning (19 per cent up from 16 per cent in 2023) indicate that estate planning, as a whole, is a growing concern for HNWs.

Strategies to reduce tax obligations and investment strategy and portfolio review were both cited by 30 per cent of investors as areas in which they would like advice but are currently not receiving it.

“HNW investors are highly focused and self-assured in their investment decisions, often preferring to explore and manage their financial affairs independently,” the report said.

“However, the significant number of unmet advice needs within this group presents a tremendous opportunity for advisers. By proactively addressing the barriers to seeking advice – such as lack of confidence, previous negative experiences, and trust issues – advisers can play a crucial role in guiding these individuals towards more informed and secure financial futures.

“Building trust and demonstrating the tangible value of professional advice, particularly through targeted education and active engagement, can unlock new opportunities for collaboration and long-term financial success.”

Praemium chief strategy officer Denis Orrock said the research showed there is a “significant” opportunity for advisers.

“As these investors grow in number and wealth, the advice and wealth management sector have a significant opportunity to provide tailored, high-value services that address their evolving priorities,” Orrock said.

“By focusing on personalised strategies, building collaborative, engaging services, and addressing tax and estate planning needs, advisers can play an integral role in helping clients navigate the complexities of wealth management.”