High net worths want more: Research

Australia's high net worth investors are looking for more from their wealth advisers, including broader access to alternatives.

The 2019 Powerwrap and Investment Trends HNW Investor Report shows 58% of HNWs have unmet advice needs, an increase of four percentage points on last year's results.

Investment Trends wealth management research director Recep III Peker said there was "actually a really wide range of topics" HNWs were looking for advice on, including ETFs and intergenerational planning.

"ETFs are a popular one because the great thing about ETFs for high net worths is the low cost access to whatever you might want exposure to. Things like particular parts of the US market, or the global economy or particular sectors," Peker said.

Peker added there were many different ways for the advice market to better serve HNW clients, pointing out the needs of HNW were no longer siloed like previously, with the proportion of ultra-high net worths using full service stockbrokers now just half of what it was five years ago.

"They're feeling that their needs aren't necessarily being met because their needs are no longer just one thing, they need help with a wider range of areas," Peker said.

"For example full service stockbrokers, why has their usage halved? Back in the day, you'd go to a full service stockbroker if you needed them to transact on equities for you.

"But if you don't think Aussie equities are going to do well, and if you're perception of full service stockbrokers is that they're long only Aussie equities, that makes them less relevant to the market."

According to the report, just 25% of HNW investors believe the current range of products available to them is sufficient, with greater access to alternatives and private equity on their wishlist.

"There's quite a bit of acknowledgement and demand for having more alternatives exposure in their portfolio. You have 30% of HNW investors saying 'I either currently have or I would like to have alternatives in my portfolio,'" he said.

"'Who are the advisers who can help me get that allocation?'"

Powerwrap chief executive Will Davidson said the findings were consistent with what the platform provider was seeing in its HNW investor client base.

"At Powerwrap, we have noticed a healthy demand for alternative assets," Davidson said.

"Many of these investments are not typically available via a platform structure, so we work closely with adviser groups using our platform to ensure we can facilitate access.

"On average, 14% of Powerwrap's HNW investor portfolios are held in this asset class and given the current climate we expect this asset class to continue to represent a significant proportion of portfolios in the year ahead."

The research also revealed Australia's HNW population grew for the third consecutive year, with 490,000 HNW investors now controlling more than $2 trillion in investable assets.

Read more: PowerwrapResearchInvestment TrendsRecep III PekerWill Davidson
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