Home / In Practice / Number of wealthy investors not seeking advice ‘persistently’ high

Number of wealthy investors not seeking advice ‘persistently’ high

Even though there are thousands more HNW investors in the country this year, they are a lot less willing to pay the going rate for financial advice according to Praemium and Investment Trends.
In Practice

There may be more high-net-worth (HNW) investors in the country than there were a year ago, but the cohort opting to pay for financial advice “remains persistently high” according to Praemium.

The platform provider again sponsored this year’s iteration of the Investment Trends High Net Worth Investor report, which showed that the number of Australians with investible assets over $1 million increase by 10,000 in the past year – from 625,000 to 635,000 – yet the percentage not receiving financial advice climbed from 60 per cent to 65 per cent.

The results are a likely representation of the market forces affecting the financial advice industry, with the contracting adviser workforce – which has shrunk ~40 per cent since 2018 – not able to service as many financial advice clients as it has done in the past.

  • The cost to serve for advisers has also risen significantly in recent years due to several factors including higher salary costs, higher professional indemnity premiums and an increasing adviser levy, which has forced advisers to focus on a smaller cohort of higher paying clients.

    According to Praemium, the reluctance of HNWs to pay for financial advice doesn’t mean they don’t recognise its value.

    “Despite a reticence to seek guidance, HNWs acknowledge a need for advice with inheritance and estate planning, intergenerational advice, and aged care ranking,” the platform provider stated. “The need for advice in these areas is now at its highest in the three years Praemium has been sponsoring this research.” 

    Despite the increase in HNWs not paying for advice, the perception that financial advice costs too much fell from 32 per cent of respondents to 22 per cent this year. Among the three reasons HNWs didn’t obtain financial advice, the three most common were:

    • Prefer to seek advice only when I need it
    • Can manage my own financial affairs, and
    • Lack of confidence in advisers’ expertise

    Praemium CEO Anthony Wamstecker said the development could push advisers to change their service offering so it aligns moreso with client needs.

    “There remains demand for several key advice areas among HNWs – including inheritance and estate planning, strategies to reduce tax, portfolio review, retirement planning and intergenerational advice – but challenges and opportunities remain for advisers, and others in the financial advice industry, to offer services tailored to what investors want,” he said.

    Print Article

    What paraplanners want: How advisers can work better, ditch the double-ups and make staff smile

    It’s not a corner office or a fatter pay packet at the top of paraplanners’ collective wish list, but something that is much more beneficial to financial advice practices and the clients they serve.

    Tahn Sharpe | 30th Nov 2023 | More
    Advisers offered ‘$50K bump in salary’ as talent poachers circle

    It’s not just money being thrown at financial advisers, with title changes, more responsibility and “other added benefits” also on offer according to financial services recruitment teams.

    Tahn Sharpe | 19th Oct 2023 | More
    Bridging the generational divide key to ‘daunting’ Professional Year

    When an industry full of Gen X and Baby Boomer advisers is assigned the task of training swathes of largely millennial acolytes, there’s bound to be a few bones of contention according to Brisbane adviser Jaxon King.

    Jaxon King | 11th Sep 2023 | More
  • Popular posts: