What a wealthy client is worth
There is still time for people to grow their wealth after the age of 60 but opportunities tend to decline once they reach their 60s, according to new research released this week.
What is more, the research suggests the average lifetime value of a wealthy client to the financial services industry is $1 million.
The study conducted by Wealth Benchmarks confirms the findings of earlier research, including that the amount of revenue generated by individuals depends on client and household holdings and varies by age.
However, it said that the generally increasing relationship between age above 21 and revenue suggests that about two-thirds of total opportunity is still accessible from age 50 onwards, but after age 60, 60 per cent of the opportunity is lost.
The report’s author, Dr Douglas Turek, said looking at superannuation, while 90 per cent of working individuals contributed to super, only 40 per cent made additional contributions.
He said the self-employed contributed a lower proportion of their income to super but that by age 60, superannuation captured about 70 per cent of investment assets overall.
The study found that there was some evidence that investment property was ‘sacrificed’ around the age of 60 and the proceeds contributed to more tax-effective superannuation.
It found that wealthy individuals were big users of life insurance but that the level and type of cover they took out varied widely, in part reflecting those who had advisory relationships and those who don’t.
AUTHOR
Mike Taylor
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