Wealth in Australia: HNW Investors 2017

  • ID: 4256760
  • Report
  • Region: Australia
  • 49 pages
  • GlobalData
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Wealth in Australia: HNW Investors 2017


"Wealth in Australia: HNW Investors 2017", analyzes the investing preferences and portfolio allocation of Australian HNW investors. The report is based on our proprietary Global Wealth Managers Survey.

Australia is known for its multicultural landscape, which is reflected in the country’s HNW market. HNW investors in Australia stem from a range of different backgrounds and have distinctive demand patterns. The bulk of HNW individuals have accumulated their wealth through earned income, and the financial services and mining sectors are key generators of wealth. Investors show a strong affinity for equity investments, allocating almost half of their wealth into this asset class in order to benefit from Australia’s dividend imputation system. When it comes to asset management services, advisory is the preferred type of mandate, but wealth managers cannot afford to ignore the opportunity automated investment services provide

Specifically the report:
- Profiles the average Australian HNW investor in terms of their demographics and analyzes the expat opportunity in Australia.
- Analyzes which wealth management mandates are preferred among Australian HNW investors and how demand will develop going forward.
- Examines the allocation of Australian HNW investors’ portfolios into different asset classes and how the allocation is expected to develop in the future.
- Analyzes product and service demand among Australian HNW investors.

- Almost half of HNW individuals in Australia have accumulated their wealth through earned income, but entrepreneurs and family business owners are also key segments.
- While representing a slightly lower proportion than in the wider region, expats still constitute an attractive target segment in Australia, accounting for 8.3% of the country’s HNW individuals.
- A lack of time is driving uptake of professional advice, while a reluctance to relinquish control has seen advisory asset management become the service of choice.
- Australian HNW investors show strong and rising demand for tax, pension, and financial planning, but demand for all planning services is on the rise, making a multi-service proposition critical.

Reasons to buy
- Develop and enhance your client targeting strategies using our data on HNW profiles and sources of wealth.
- Give your marketing strategies the edge required and capture new clients using insights from our data on HNW investors’ drivers for seeking investment advice vs self-directing.
- Tailor your investment product portfolio to match current and future demand for different asset classes among HNW individuals.
- Develop your service proposition to match the product and service demand expressed by Australian HNW investors and react proactively to the forecasted changes in demand.
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1.1. Australian HNWs come from a range of different backgrounds
1.2. Key findings
1.3. Critical success factors
2.1. HNW investors who have accumulated their fortunes through earned income remain the largest segment
2.1.1. The vast majority of Australian HNW investors are approaching or have reached retirement age, making wealth preservation strategies key
2.1.2. Professionals dominate Australia’s wealth market, but entrepreneurs are also a lucrative target market
2.1.3. The financial services industry is the main wealth generator, but mining remains important
2.1.4. Australian HNW investors are more likely to hold director roles than their peers in the wider region
2.2. Expats are a below-average but lucrative segment in Australia
2.2.1. Expats constitute 8.3% of the local HNW population
2.2.2. Stricter investment criteria under the Significant Investor Visa has resulted in a drop in applicants
2.2.3. HNW expats from the UK and Asia Pacific represent an attractive target segment
2.2.4. Fear of having insufficient control and steep forex fees motivate HNW expats to invest in Australia
3.1. A lack of time is driving uptake of advice
3.1.1. Australian HNW investors use an average of two wealth management firms
3.1.2. Lack of time is motivating HNW investors to seek professional advice
3.1.3. The majority of HNW wealth is kept in advisory mandates
3.1.4. However, a multi-asset management strategy is key in Australia
3.2. Automated investment services are not a threat, but an opportunity
3.2.1. Demand for automated investment services is on the rise
3.2.2. Investors’ reluctance to relinquish control means that advisory mandates will maintain their leading position
3.2.3. Cost considerations are driving uptake of self-directed services
4.1. A desire to further diversify their portfolios will drive uptake of alternatives among HNW investors
4.1.1. Equities dominate the typical HNW portfolio, exposing it to greater volatility
4.1.2. Equities constitute almost half of HNW investors’ managed wealth
4.1.3. Bond investments have decreased in popularity over the past year, and will continue to do so
4.1.4. Cash and near-cash investments constitute a significantly smaller part of the Australian HNW portfolio than in the wider region
4.1.5. Some work has to be done to convince investors of the benefits of alternatives
4.1.6. Commodity investments are of little interest to Australian HNW clients
5.1. Wealth managers should lead with financial planning and SMSF services
5.1.1. Superannuation is a critical element of wealth management, even for HNW investors
5.1.2. A multi-service proposition is key to competing in Australia’s HNW market
6.1. Abbreviations and acronyms
6.2. Definitions
6.2.1. Affluent
6.2.2. HNW
6.2.3. Liquid assets
6.2.4. Mass affluent
6.2.5. SMSF
6.2.6. Superannuation
6.3. Methodology
6.3.1. 2016 Global Wealth Managers Survey
6.3.2. 2015 Global Wealth Managers Survey

List of Tables
Table 1: Significant Investor Visa statistics, 2017
Table 2: Central bank interest rates, April 2017, and inflation rates, 2017

List of Figures
Figure 1: The average Australian HNW investor is male and above the age of 50
Figure 2: Professionals dominate Australia’s wealth market
Figure 3: The bulk of HNW investors have sourced their wealth from the financial services sector
Figure 4: Director is the most common title held by Australian HNW individuals
Figure 5: Expats represent a below-average proportion of the Australian HNW population
Figure 6: UK migrants dominate Australia’s HNW expat market
Figure 7: Credit Suisse targets HNW expats in Australia
Figure 8: HNW expats residing in Australia want to stay in control of their investments
Figure 9: Australian HNW investors prefer to work with two wealth management firms
Figure 10: Lack of time drives financial advice uptake, making convenience an implicit part of a wealth service
Figure 11: The majority of HNW wealth is in advisory mandates, meaning it is a critical element of every wealth manager’s offering
Figure 12: Australian HNW individuals demand advisory mandates, reflecting a desire for control
Figure 13: Demand for automated investment services is forecast to increase
Figure 14: HNW investors are reluctant to relinquish control over their investments
Figure 15: Australian HNW investors self-direct at least some of their wealth to avoid management fees
Figure 16: Australia’s HNW investors are heavily exposed to equities, although future growth will be in other asset classes
Figure 17: HNW investors prefer direct equity holdings, making market access a hygiene factor
Figure 18: Capital appreciation opportunities and dividend income are the top drivers of equity investments
Figure 19: HNW investors allocate just 7.3% of managed wealth to fixed-income products
Figure 20: Demand for fixed-income products is set to decrease
Figure 21: Less than 13% of managed HNW wealth is held in cash products
Figure 22: Already low HNW demand for cash products is expected to stagnate
Figure 23: Offering REITs is a must in Australia given the country’s strong property market
Figure 24: Rental income is the key driver of property investments
Figure 25: Alternatives constitute a minor proportion of the typical HNW portfolio
Figure 26: Diversification benefits are driving demand for alternatives
Figure 27: Commodities are of little interest to Australian investors
Figure 28: Commodity holdings are forecast to remain low
Figure 29: Financial planning services experience by far the strongest demand
Figure 30: Already strong HNW demand for financial and pension planning services is forecast to increase further
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