Craig Brooke from KeyInvest speaks to James Dunn from The Inside Network on finding the cream of private credit crop. The Inside Adviser
Clearview and trustee ETSL have raised eyebrows and confused advisers by shifting the popular WealthFoundations super and pension product to investment platform provider HUB24. “It’s like a power plant being run by a battery,” says adviser Jason Poole. “It makes no sense.”
Population of ultra-wealthy surges worldwide
Last year’s global economic rebound, combined with increases in the prices of shares and property, have boosted the number of ultra-wealthy people worldwide, with their number rising at a faster pace in 2021 than in 2020, despite the lingering Covid-19 pandemic.
The number of ultra-high-net-worth individuals (UHNWIs), or those with US$30 million ($40 million) or more in net assets, jumped 9.3 per cent in 2021 to 610,568 people, beating growth of 2.4 per cent in 2020, according to Knight Frank’s annual wealth report released this month. In Australia, the population of UHNWIs rose to 20,874 from 18,958 people, a rise of 10.1 per cent.
“Globally, pandemic-related restrictions and lifestyle shifts have led to amassed savings and an increase in levels of wealth that has not been seen for years,” the Knight Frank report found.
“Few imagined at the start of the Covid-19 crisis that we would experience the V- or “Nike Swoosh”-shaped recovery that saw many economies back to pre-pandemic levels by the end of 2021. This may explain why our Attitudes Survey respondents are so bullish – 83 per cent expect their clients’ wealth to increase in 2022.”
Over the ten years to 2026, the report predicts a more than doubling in the number of global UHNWIs – from 348,355 to 783,671, representing a growth rate of 28.4 per cent. By 2026, Asia will surpass Europe as the second-largest regional wealth hub. During that time, Knight Frank predicts, for example, that Singapore will have witnessed a 268 per cent growth in its UHNWI population to around 6,000, up from 4,206 in 2021.
Australasia leads gains
Overall, Asia too will lead growth in the population of the ultra-wealthy. The ten-year growth in the number of UHNWIs is led by Australasia. The region’s UHNWI population, led by New Zealand (going to 4,618 by 2026, up from 1,249 in 2021), is expected to more than treble by 2026. Australia’s UHNWI population is expected to grow to 27,330 by 2026, up from 20,874 in 2021, representing a growth rate of 30.9 per cent.
Property drives gains in wealth in Australia
In Australia, gains in household wealth have been spurred on by big rises in property prices. Total household wealth increased 4.4 per cent ($590 billion) in the September quarter of 2021, reaching a record $13.92 trillion. Wealth per capita also rose to a record high of $540,179 according to figures from the Australian Bureau of Statistics (ABS).
Those numbers are expected to be exceeded in the December quarter of 2021. Recent data from the ABS shows that residential property prices surged 23.7 per cent through the year to December quarter 2021, the strongest annual growth since the ABS’s Residential Property Price Index series began in the September quarter 2003.
ABS Head of Prices Statistics Michelle Marquardt said growth in house prices continues to outpace price growth for units. House prices rose 27.5 per cent through the year, while prices of attached dwellings, or units, rose 14.0 per cent.
“Results were consistent with a range of housing market indicators. New lending commitments for housing rose to a record high value in the December quarter 2021. Days on market fell and sales transaction volumes increased. Record low interest rates and strong demand have continued to support growth in property prices,” Marquardt said.
