HNW Aussies holding more local equities
Australian equities are the most popular asset class for high net wealth (HNW) Australians, jumping 17% from three years ago, according to research.
Polling Australians with at least $1 million in investable assets, Crestone Wealth Management’s ‘State of Wealth’ report showed cash (72.4%), Australian equities (73.4%), and residential property (43.4%) were the top three investment choices for HNW clients.
The research showed a bias toward local investment following COVID-19 with the portion intending to reduce international exposure jumping from 15.1% in 2019 to 18.3% in 2020 and 34.7% in 2021.
Though that mostly came from younger individuals as older high-net-worth individuals were less interested in changing investment portfolios.
Over half (52.2%) of generation Y were intent on reducing international exposure compared to 37.2% of generation X and only 9.8% of baby boomers.
Crestone’s head of strategy and development, Clark Morgan, said the research provided a vital snapshot of high-net-worth and ultra-high-net-worth investor mindsets pre-pandemic to 2021.
“While their top three asset classes have not changed, we have seen a trend towards more diversification,” he said.
“That’s potentially driven by an increased uptake in financial advice among wealthy Australians.”
Morgan said it was wrong to assume the majority achieved their wealth by taking risks as most remained wealthy by being relatively cautious.
“But they still rely on what’s familiar,” Morgan said.
“Arguably their portfolios are still not as diversified as one would like, with still a strong reliance on cash, Australian equities, and residential property, but it is trending positively in correlation with further engagement with financial advisers.”
AUTHOR
Liam Cormican
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
