Press Releases High-net-worth investor landscape evolves with rising numbers, growing wealth, and expanding needs for expert advice

The high-net-worth (HNW) investor landscape is undergoing significant transformation, driven by unprecedented growth in both the number of investors and the total wealth they control. Praemium in conjunction with Investment Trends has released the 2024 HNW Investor Report, which outlines that despite cost-of-living pressures, Australia’s wealthiest are getting wealthier. The latest survey showed that HNWs are continuing to diversify their investment portfolios and seek increasingly sophisticated and personalised financial strategies, presenting advisers opportunities to provide tailored support and guidance.

Research Key Trends and Findings:

1. Record Growth in Numbers and Wealth
   The population of HNW investors has reached a new high, with 690,000 individuals now classified as high-net-worth, marking an 8.7% increase from 635,000 in 2023. These investors collectively manage $3.4 trillion in investable assets*, up from $2.98 trillion in the previous year. This rapid expansion underscores the dynamic nature of wealth accumulation among the affluent, with ultra-high-net-worth (UHNW) individuals experiencing double-digit portfolio growth over the past year.
2. Evolving Investment Goals and Diversification Strategies
   As the financial landscape changes, HNW investors are shifting their priorities from income generation to a more balanced investment approach that includes capital growth and wealth preservation. The growing interest in private markets is evident, with 146,000 HNW investors currently engaged in private market investments and an additional 32,000 planning to enter this space within the next year. This trend reflects a desire for diversification and higher returns, particularly among UHNW individuals, who are drawn to the potential of private equity, venture capital, and private debt funds.
3. Increasing Need for Specialised Advice
   Despite the rise in wealth and sophistication among HNW investors, there remains a substantial demand for specialised advice. Key areas that HNWs say they require advice include estate planning, tax optimisation, and investment strategy reviews. A sizeable proportion of HNW investors, particularly those in the $5 - $10 million range, are seeking expert guidance to navigate the complexities of managing substantial wealth and preparing for intergenerational transfer. Additionally, as more investors take a self-directed approach or seek episodic advice, the role of advisers in providing targeted, specialised advice becomes even more critical.
4. Opportunities in Wealth Transfer and Philanthropic Giving
   With $1.9 trillion poised to be transferred to the next generation, wealth transfer planning is increasingly becoming a focus for HNW individuals. Many investors are also incorporating philanthropy into their financial plans, with 40% intending to leave a portion of their wealth to charitable causes. This shift presents a unique opportunity for advisers to offer strategic guidance on philanthropic giving, helping clients align their financial legacy with their personal values.
5. Continued Demand for Adviser Support
   As the HNW landscape evolves, the need for expert financial advice remains strong. Advisers have a unique opportunity to support HNW clients by offering comprehensive, customised strategies that address their specific needs and preferences. From navigating private market investments to optimising wealth transfer plans, advisers can play a crucial role in helping HNW investors achieve their financial goals and secure their legacy for future generations.

"Australia’s high-net-worth investor remains a dynamic and ever-evolving segment and this year’s research, highlights a noticeable shift in their investment and advice requirements.," said Denis Orrock, Praemium’s Chief Strategy Officer. "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. 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. Likewise, platforms can also play an increasingly important role in providing access to exclusive investment opportunities, and the tools and reporting this investor demands to stay informed about their investment performance and their long-term financial goals."