High-Net-Worth (HNW) & Sophisticated Investing Market in Australia:
Understanding current HNW Investment Market trends and identifying the types of investments that are most attractive to High-Net-Worth (HNW) and Sophisticated investors.
Australia's HNW & Sophisticated Investment market
Australia’s high net worth (HNW) and the sophisticated investing market is a significant and growing segment of our domestic financial services industry. According to the 2022 High Net Worth Investor Report, the population of those who control over a million dollars in investable assets was 625,000 in 2022, down from 635,000 in 2021. This is considerably still larger than the population of 485,000 in 2020. Collectively, HNW investors control $2.82 trillion, up from $2.72 trillion in 2021.
The HNW and sophisticated investing market in Australia are characterized by a diverse range of investment options, including traditional assets such as equities, fixed income, and real estate, as well as alternative investments such as private equity, private debt, venture capital, and hedge funds.
These investors generally look for higher returns and often stable income distributions outside traditional investments, such as stocks and bonds. HNW and Sophisticated investors in Australia are also increasingly looking to invest offshore to take advantage of growth opportunities in other markets. They are also more likely to utilise the stock market for diversification and use sophisticated strategies such as derivatives and options.
Market Trends & Challenges:
The greatest challenge to most industry stakeholders in this market is that HNW and Sophisticated Investors are becoming increasingly aware of their options and are now more informed than ever. Yet, Australia’s market for HNW and Sophisticated investors is a rapidly growing sector and remains a great asset to our domestic economy.
Investors are developing more awareness of the alternative investment markets, their performance, and the level of security they can provide through the majority of these investment options, such as secured debt, real estate, and other hedging strategies. As such, the market is expected to continue growing in the coming years. This exposure increases investors’ sophistication, creating unique demands and needs that traditional investment solutions cannot meet.
To bridge this gap between investors’ expectations and financial product providers, BMAM foresees industry stakeholders will need to expand their customer service capabilities, provide more tailored financial advice and investment services, incorporate high-income producing and secured debt and alternative income strategies into their portfolios, and develop more sophisticated and secure technology solutions to engage with the HNW and Sophisticated investors.
Most importantly, this should expand beyond leveraging Robo-advice and other automated services to provide personalised advice and improved security measures to ensure the safety of customer data. This should be focused more on performance, protecting investors’ wealth, and rigorous accountability culture by all industry stakeholders.
How we can help
A range of financial institutions, including banks, independent wealth management firms, and boutique investment firms, serves Australia’s HNW and sophisticated investing market. These institutions, including B. Moses Asset Management and our Private Wealth arm, offer a wide range of investment products and services tailored to the specific needs of HNW and sophisticated investors.
Our team of experienced Private Wealth Advisors will work closely with you to create a customised investment strategy that aligns with your specific financial goals. We will provide regular updates on your investments and transparent reporting to ensure that you are always informed about your portfolio’s performance. With our expertise and commitment to providing the best possible returns for our clients, you can expect us to be accountable to you and trust us to be objective throughout your advice and investment journey with B. Moses.