Roy Keenan from Yarra Capital Management shares insights with James Dunn from The Inside Network on the role of active management. The Inside Adviser
After the Hayne Royal Commission many advisers decided to steer away from large dealer groups in favour of becoming self-licensed. In the last six months, however, that trend has taken an abrupt turn.
Australia’s rich ‘bullish and confident’
Data released from platform provider Praemium (ASX: PPS) has shown that the rich are getting richer and more confident, moving on quickly from the pandemic.
The research report, commissioned by Praemium and carried out by research company InvestmentTrends, surveyed about 11,000 investors of which 2,200 were high-net-worth; it offers valuable insights to financial advisers seeking to service this cohort.
Findings from the report were that Australian HNW investors were actually growing in numbers following the pandemic, had fewer significant worries, and were increasingly confident about the direction of the share market.
The key figures:
- There are 635,000 millionaires in Australia, who control $2.77 trillion in investable assets.
- A year ago this number was 488,000 and $2.02 trillion, rises of 31% and 37% respectively.
- Roughly 68% of HNW investors expect the stock market to rise (up from 40% in 2020)
- ETFs and cryptocurrencies were the asset classes that saw the largest growth in uptake among HNW investors during the past year
Anthony Wamsteker, CEO of Praemium said, “During the COVID-19 Pandemic, Australian investors could have been excused for retreating into their shells a little, with the share market bumping along the bottom for a while.
“But the research shows that Australia’s wealthiest investors are a very optimistic group. Once they got over the shock of the fall in the share market, they were happy to weigh back in. Their levels of optimism are much higher than they were a year ago.”
He also highlighted the growing need for financial advice and unmet advice needs for HNW Australian investors, and the reluctance from many investors to use investment advisers.
“This presents an opportunity for Australian investment advisers to help meet these needs via a holistic total wealth management experience. Articulating the value their advice can bring and adapting to provide HNWs with superior and sophisticated service and technology will help to meet the needs of this growing and important investor segment,” says Wamsteker.
Praemium’s research also showed that Australian HNWs were eager to continue riding the Australian bull market, with 20% of respondents looking to maximise capital growth next year.
In terms of the advice requirements of Australian HNWs, the research report said, “13% of respondents said they were happy to use investment advisers; 52% said they were happy to use advisers only to validate their own thoughts, to gain access to a wider range of investments or for technical skills; and 33% said they did not use advisers at all. During the past year, the percentage of HNWs using accountants for tax advice rose from 52% to 56%, while those using investment advisers fell slightly from 41% to 40%.”
