A new report, released by Praemium in collaboration with Investment Trends, has revealed that the number of high net worth individuals in Australia has jumped to 690,000, an increase of 8.7 per cent on the previous year’s figure of 635,000 .
Collectively, these investors now control $3.4 trillion in investable assets, up from $2.98 trillion in 2023.
According to Praemium, this notable expansion highlights the vigorous accumulation of wealth among Australia’s wealthy, with high net worth individuals (UHNW) enjoying double-digit growth in their portfolios over the past year.
“Australian high-net-worth investors remain a dynamic and evolving segment and this year’s study highlights a notable shift in their investment and advisory needs,” said Praemium Chief Strategy Officer Denis Orrock. .
“As the number and wealth of these investors grow, the advisory and wealth management industry has a significant opportunity to provide tailored, high-value services that meet their changing priorities.
The report also highlighted a shift in investment priorities among the wealthy. Indeed, while income generation was previously a priority, investors now favor a balanced approach that emphasizes capital growth and wealth preservation.
A growing trend towards private market investments is evident, with 146,000 high net worth investors currently engaged in this sector and a further 32,000 planning to invest in private equity, venture capital and private debt funds over the next year. next year.
“This trend reflects a desire for diversification and higher returns, particularly among UHNW individuals, who are attracted to the potential of private equity, venture capital and private debt funds,” the study says.
Despite the increase in wealth and sophistication among wealthy investors, the study also highlighted a “substantial demand for specialist advice”. Top areas where HNWs report needing advice include estate planning, tax optimization, and reviewing investment strategies.
Additionally, the report reveals that $1.9 trillion is expected to be transferred to the next generation, thereby emphasizing wealth transfer planning. Additionally, a growing number of investors are integrating philanthropy into their financial strategies, with 40% intending to allocate a portion of their wealth to charitable causes.
This shift provides new opportunities for advisors to help their clients align their financial legacy with their personal values through strategic philanthropic planning.
The research is based on a quantitative online survey of high-net-worth investors conducted by Investment Trends between June and July 2024, with a total of 1,530 validated responses.
