A new report, released by Praemium in conjunction with Investment Trends, has revealed that the number of high-net-worth individuals in Australia has surged to 690,000, marking an 8.7 per cent increase from the previous year’s figure of 635,000.
Collectively, these investors now control $3.4 trillion in investable assets, up from $2.98 trillion in 2023.
According to Praemium, this notable expansion highlights the vigorous accumulation of wealth among Australia’s affluent, with ultra-high-net-worth (UHNW) individuals enjoying double-digit growth in their portfolios over the past year.
“Australia’s high-net-worth investor remains a dynamic and ever-evolving segment and this year’s research, highlights a noticeable shift in their investment and advice requirements,” said Denis Orrock, Praemium’s chief strategy officer.
“As these investors grow in number and wealth, the advice and wealth management sector have a significant opportunity to provide tailored, high-value services that address their evolving priorities.”
The report also highlighted a shift in investment priorities among HNWs. Namely, while income generation was previously a primary focus, investors are now prioritising a balanced approach that emphasises capital growth and wealth preservation.
A growing trend towards private market investments is evident, with 146,000 HNW investors currently engaged in this space and another 32,000 planning to invest in private equity, venture capital, and private debt funds within the next year.
“This trend reflects a desire for diversification and higher returns, particularly among UHNW individuals, who are drawn to the potential of private equity, venture capital, and private debt funds,” the research reads.
Despite the rise in wealth and sophistication among HNW investors, the research also pointed to a “substantial demand for specialised advice”. Key areas that HNWs say they require advice include estate planning, tax optimisation, and investment strategy reviews.
Moreover, the report revealed that $1.9 trillion is expected to be transferred to the next generation, placing significant emphasis on wealth transfer planning. Additionally, a growing number of investors are integrating philanthropy into their financial strategies, with 40 per cent intending to allocate a portion of their wealth to charitable causes.
This shift presents new opportunities for advisers to assist clients in aligning their financial legacies with their personal values through strategic philanthropic planning.
The research is based on a quantitative online survey of high-net-worth investors conducted by Investment Trends between June and July 2024, with a total of 1,530 validated responses.
