Non-custody assets to play an increasing role in HNW portfolios
Non-custody assets to play an increasing role in HNW portfolios
New research conducted by Praemium has revealed a significant trend among financial advisers serving high-net-worth (HNW) clients: the increasing adoption of non-custodial assets.
The comprehensive study with leading research house CoreData found that 75% of HNW-focused advisers now work with clients that have non-custodial holdings in their portfolios, with these assets comprising an average of 26% of the total portfolio value. This shift reflects growing client demand for investment flexibility and personalised portfolio management.
Key findings from the research include:
- 46% of advisers see bespoke investment strategies as among their top three strategies for delivering personalised service to clients
- Over one-third of HNW-focused advisers have noticed an increase in non-custodial assets in the past three years
- 50% of HNW advisers predict non-custody solutions will have either a growing or essential role in wealth management over the next 3-5 years
- 37% of HNW-focused advisers report having clients invested in alternative assets in the last 12 months
Despite the growing relevance, the study highlighted several challenges advisers face when incorporating non-custodial assets. Administrative complexity is a concern for 66% of HNW-focused advisers, while knowledge gaps remain substantial, with only 53% reporting familiarity with these solutions.
Praemium’s Chief Strategy Officer Denis Orrock: "High-net-worth investors are increasingly demanding bespoke investment strategies, and advisers must respond by building robust non-custodial solutions into their offering. As the independently rated No. 1 platform for non-custodial assets, we understand that success hinges on advisers' ability to educate themselves and their clients about the diverse investment opportunities available.
“With the right platform partner advisers can seamlessly integrate custody and non-custody assets into a single, holistic view and fully leverage the opportunities presented by non-custodial solutions, addressing administrative complexities while delivering comprehensive reporting that meets the sophisticated needs of today's investors.” Orrock adds.
The full research can be accessed via https://www.praemium.com/non-custody-research/