Accountants in driver’s seat as wealthy clients’ 2017 patterns revealed

Accountants in driver’s seat as wealthy clients’ 2017 patterns revealed

Investment trends, patterns

Australian high-net-worth investor numbers have risen for the first time since 2014, and there is “significant” market demand in particular for accountants to meet the unmet advice needs of wealthy Australians.

The Investment Trends 2017 High Net Worth Investor Report shows there are now 435,000 investors with over $1 million in investable assets outside of their own home, business and non-SMSF super, up by 2 per cent over the last 12 months following two consecutive years of decline.

Speaking to Accountants Daily, Investment Trends senior analyst King Loong Choi said licensed accountants have a significant opportunity to tap into the high-net-worth (HNW) market, given that 53 per cent of HNW investors indicated that they had unmet advice needs.

“Among the 230,000 HNW investors who have unmet advice needs, 22 per cent said they would most likely turn to an accountant for this advice,” said Mr Choi.

“The key question for accountants is how they may look to service these clients’ advice needs, whether it be themselves providing the advice, partnering with financial planning firms or some other method.”

The report revealed that HNW investors were struggling to identify good investment opportunities, parking up to $100 billion, a third of total cash holdings, as ‘excess cash’, or monies that would normally have been allocated to growth investments.

“Almost all HNW investors say they expect to face investment-related challenges in the coming year, and this uncertainty has led to a large build-up of cash holdings,” said Mr Choi.

“Right now, the perceived threat of another global financial crisis and difficulties in investment selection are the two biggest concerns of HNWs.

“Despite their muted outlook, half of HNW investors want material capital growth in their portfolios in the year ahead, and product manufacturers and technology providers play a vital role in assisting HNWs achieve their investment goals.”

Mr Choi further highlighted the role an accountant could play in this market, even if the investor was already working with another adviser.

“Right now, HNW investors have a range of unmet advice needs that most often centre around investment strategy and retirement,” said Mr Choi.

“HNWs themselves understand that a single adviser may not necessarily possess the expertise to meet all their advice needs, with only 31 per cent believing it is important that one individual provides an all-encompassing service.

“Advice providers could therefore adopt and promote a team-based approach to more effectively service the HNW market.”

Additionally, the HNW population is estimated to control $1.7 trillion in investable assets, up 12 per cent over the last 12 months.

Accountants in driver’s seat as wealthy clients’ 2017 patterns revealed
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