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Financial Planning
HNWs change views on advice

New research from Investment Trends has revealed that high-net-worth investors in Australia have changed their view of professional financial advice since the pandemic.

Investment Trends found that there are 485,000 HNW investors in Australia as of September 2020, defined as those with over $1 million in investable assets outside their home, business and non-SMSF super.

Among this group, there has been a sharp increase in the number of HNWs that are open to receiving professional financial advice. More than half of HNWs, 56%, are now open to receiving advice while 12 months ago only 40% were.

"The size of the Australian HNW population remains resilient despite tough market conditions at home and abroad. While the uncertain investing climate had minimal impact on market size, it has profoundly impacted the attitudes and preferences of HNW investors towards investing and advice," Investment Trends associate research director King Loong Choi said.

"The last 12 months saw a large shift in the perceptions of advice among HNW investors, with a sharp increase in 'validators' who are open to receiving financial advice (56%, up from 40% in 2019) and a corresponding fall in 'self-directed' HNWs who prefer making decisions on their own (34%, down from 49%)."

However, the research found that this shift in attitude has not led to greater uptake of advice. Over the last 12 months, the use of financial advisers (19%) full-service stockbrokers (15%), wealth managers (7%) and private banks (5%) among HNWs has largely remained static.

"The disjoint between the positive views towards advice providers and the current muted uptake of advice highlights how advice providers need to rethink their value proposition and delivery model," Choi said.

"The uncertainties caused by the pandemic has prompted many HNWs to reconsider how they view professional financial advice, which presents a unique opportunity for advice providers to demonstrate their value-add - through their technical expertise, guidance and proactive communications."

Read more: HNWInvestment TrendsKing Loong Choi