Australia’s 500,000 high net worth investors want more out of their investments, survey shows
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There are 490,000 high net worth investors in Australia with just over $2 trillion in investible assets. This is 13 per cent higher than last year and nearly double the level in 2008.
Since 2016, their assets have risen by 21 per cent.
But 58 per cent said their needs were not being met according to Powerwrap’s (ASX:PWL) annual high net Worth investor survey released last week.
Powerwrap CEO Will Davidson told Stockhead advisors had to shift to meet their needs – specifically they wanted more than just managed funds and shares.
He named several assets that were in demand from high net worth investors including hedge funds, bonds and ETFs.
In many cases this was for the same objectives they had before such as tracking an equity index. But many of these assets may not be available via modern financial platforms.
“It’s a move from managed funds to low cost ETFs just as a mechanism of getting access to the index,” he said.
“They’re trying to get exposure to infrastructure, private equity and hedge funds.
“We are a platform that can execute all these things and the findings we’re seeing…there’s a lot of unmet demand. They want private advisors to give them advice beyond Aussie equities.”
Forty per cent of investors surveyed recently made a strategic change to their asset allocation and half of these have become more defensive.
A defensive investment strategy involves building a portfolio that attempts to minimize the risk of losing your money.
Davidson told Stockhead that the overall majority had not become defensive and their actions would be counter-intuitive to such a strategy.
He added that there was low interest in cryptocurrencies and derivatives such as CFDs.
Investors were also asked about their expectations for the ASX and the survey showed that they were less confident.
While last year 68 per cent expected it to rise and 21 per cent expected it to fall in 12 months, this year only 50 per cent said it would rise and 41 per cent said it would fall. The remainder expected it to stay flat.
Eighty-seven per cent were concerned about tension between the world’s economies – up from 61 per cent last year.
Among other issues that had become a concern included a China slowdown, a global share market crash and the White House administration.
But investors were less concerned about property prices, the Australian economy and the impact of regulations.
In 2016 Malcolm Turnbull’s advice to aspiring house buyers on ABC radio was ‘get a good job’. He was condemned but perhaps he was right.
The biggest source of money to build an investment portfolio was accumulated through wages and salary.
But profits from investments, shares businesses and property made up nearly as much combined and this is gradually growing.
“It’s one of those slow evolutions,” Davidson said.
“Over time you’ll see the top line continue to reduce and shares increase.”