Advice key for tech investors: WealthInsight
Sourcing specialist advice will be critical for high net worth individuals (HNWIs) looking to successfully invest in the technology sector, research from WealthInsight reveals.
WealthInsight head, Oliver Williams, warned that while the tech sector has been a "powerful wealth generator" in recent times, the number of millionaires in the US making their money from the sector over the last three years has slowed down.
"Data that those earning their wealth from tech and telecoms are decreasing adds to fears of a tech bubble," he said.
"Just as the recent tech boom has created a wave of new entrepreneurs, the curbing of their ranks is reflective of the industry's slowing."
However, despite sector's slowdown in terms of the creation of new millionaires, Williams said the volume of existing HNWIs investing in the industry through venture capitalism was at an all time high.
"With few asset classes performing as well as tech start-ups in recent years, there has been pronounced interest from HNWIs of all stripes," he said.
"We found that only 11 per cent of HNW venture capitalists are themselves from the tech sector, most are from financial services.
"That means the majority of venture capitalists investing in tech lack the industry knowledge to mitigate any deflation of a tech bubble.
"Couple with the decline in tech IPOs providing an exit for venture capital investors, the sector is no longer looking as promising in 2016."
AUTHOR
Nicholas O'Donoghue
Recommended for you
Results are out for the latest sitting of the ASIC financial advice exam, with the pass rate falling for the second consecutive sitting.
Adviser losses for the end of June have come in 143 per cent higher than the same period last year, and bring the total June loss to over 350.
ASIC’s enforcement action is having an active start to the new financial year, banning a former Queensland financial adviser for 10 years in relation to fees for no service conduct.
ASIC has confirmed the industry funding levy for the 2024–25 financial year, and how much licensees can expect to pay.
