Embracing the Shift Towards HNW Clients

As the wealth management landscape evolves, there is a noticeable shift towards catering to the unique needs of High Net Worth (HNW) individuals. This trend is underscored by a 7.8% growth in Australia's HNW population in 2023, as revealed by the Capgemini World Wealth Report 2024. With this expansion comes a heightened demand for tailored financial strategies, tax-efficient planning, and access to exclusive, diversified investment opportunities.

In particular, the impending transfer of $1.9 trillion in wealth to the next generation presents both challenges and opportunities for wealth advisers. As 40% of HNW individuals plan to leave a portion of their wealth to charitable causes, advisers need to be equipped with strategies that not only address these philanthropic inclinations but also help clients navigate complex estate and legacy planning.

At Mason Stevens, we help advisers scale their business by offering a comprehensive platform, Managed Accounts (MAs), and Outsourced Chief Investment Office (OCIO) services, designed to cater to the unique demands of HNW clients. Our experience in private markets and sophisticated investment solutions positions advisers to grow alongside their clients. Here's how we recommend advisers navigate this shift:

1. Personalisation is key

HNW clients expect highly tailored financial advice and investment strategies that align with their specific goals, risk tolerance, and lifestyle needs. By leveraging advanced data analytics and client relationship management (CRM) systems, wealth managers can gain deeper insights into their clients’ preferences and needs, which enhances the overall client experience, fosters loyalty, and strengthens long-term relationships.

2. Broaden Investment offerings

The investment needs of HNW clients are often more complex, requiring access to a wider range of investment options and asset classes. Wealth management firms should provide clients with diversified opportunities, including managed discretionary accounts (MAs) and bespoke portfolios with exposure across private equity, real estate, and alternative investments like venture capital and private debt. Capgemini's report highlights that 45% of HNW individuals are showing a growing interest in private markets, reflecting a desire for higher returns and diversification. Mason Stevens provides financial advisers broad investment services, offering unique private market wholesale investment opportunities, as well as access to exclusive equity and debt capital market deal flow, unlisted assets, foreign exchange (FX) strategies, and bespoke fixed income solutions including direct bonds. This specialised range allows advisers to construct portfolios that are not only diversified but are also positioned to deliver returns in volatile markets.

3. Offer Holistic Wealth Management solutions

HNW clients increasingly seek a comprehensive approach to wealth management that goes beyond traditional investment advice. This includes estate planning, tax optimisation, philanthropy, and intergenerational wealth transfer. Statista's research indicates that 65% of HNW individuals prefer advisers who can offer holistic solutions. By either integrating these services in-house or partnering with external specialists, wealth managers can provide greater value, helping clients manage every aspect of their financial lives.

4. Foster a High-Performance culture

To effectively service HNW clients, wealth management teams must foster a high-performance culture built on expertise, accountability, and client satisfaction. Statista's findings reveal that HNW clients rate trustworthiness and professionalism as top attributes when selecting a financial adviser. Continuous professional development, a commitment to delivering high-quality service, and a focus on building lasting client relationships are key to thriving in the HNW market.

Understanding the HNW Segment (Watch Video)

Embracing the opportunity

The rise in the number of HNW clients presents a significant opportunity for wealth management firms to grow and scale their business. By focusing on personalisation, offering a wider range of investment options, embracing technology, providing holistic solutions, and building strategic partnerships, firms can look to position themselves as trusted advisers in this evolving landscape.

Mason Stevens is committed to supporting advisers in meeting the unique needs of HNW clients by providing access to exclusive wholesale investments and a comprehensive range of institutional style investment services. To learn more about how Mason Stevens can help you grow your wealth management practice, visit masonstevens.com.au.

Sources:

• Capgemini World Wealth Report 2024
• Statista Research Department HNW Market Analysis

About Mason Stevens

Mason Stevens is a leading provider of integrated wealth platform technology that uniquely focuses on investor portfolio outcomes. More than just an administration platform, the innovative technology, paired with experienced investment specialist support, empowers advisers to deliver on their clients’ investment objectives via an unconstrained investment universe.

Established in 2010, the privately-owned firm has circa A$7.5 billion of assets on platform. Led by some of Australia’s most experienced finance and investment professionals, the company has over 80 staff nationally with offices in Sydney and Melbourne. It’s known for its investment capability, forming genuine partnerships with clients, and unlocking new growth opportunities for wealth practices.

To find out more about how we can help you grow and scale your wealth practice, visit: https://masonstevens.com.au/growth-engine/ or contact us here.

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