Key Findings of the Investment Trends 2014 High Net Worth (HNW) Investor Report:
- Australia minted 43,500 new millionaires over 2014, the largest growth in the past five years
- A quarter of a million HNWs still have unmet advice needs
- ANZ Private Bank took the lead in private banking client satisfaction
- Smaller business banks outscored the majors in HNW’s assessment of value for money
- Bell Potter closes rapidly on Macquarie as the most used full service stockbroker among HNW investors
Investment Trends has released its annual 2014 High Net Worth (HNW) Investor Report, by far the largest study of HNW investors in the country, based on a survey of 3,115 Australian millionaires, collectively holding about $11bn in investable assets.
Australia minted 43,500 new millionaires over 2014, the largest growth in the past five years
The HNW investor population swelled from 400,000 in November 2013 to 443,500 in October 2014.
“This is the largest annual increase in the number of HNW investors we’ve seen in the past five years,” said Irene Guiamatsia, Analyst at Investment Trends. “Collectively, Australia’s HNW investors hold 1.6 trillion in assets, nearly equivalent to the entire superannuation industry.”
The growth was primarily fuelled by a strong performance of the share market (up 12%) and the property market (up 9%). During the period, Special Investor Visa holders (better known as the 888 visa, aimed at attracting affluent Chinese investors) brought $2bn onshore, but with an estimated 385 visas issued, represented less than 1% of the growth in millionaire numbers.
A quarter of a million HNWs still have unmet advice needs
175,000 HNW investors used an investment adviser in the 12 months to October 2014. Whilst steady in absolute terms, this represents a decrease in usage from 44% of HNWs in 2013 to 40% in 2014.
The demand for additional advice is, however, alive and well; despite advisers working hard to target this market, 256,000 HNWs report having unmet advice needs.
“HNWs are prepared to spend, collectively, an additional $560m annually on advice, which is on top of the $1.9 bn they are already paying. This is a tangible opportunity for the financial advice industry,” said Guiamatsia.
ANZ Private Bank took the lead in private banking client satisfaction
Among HNWs using advisers reported being happier with them than a year ago. Among private banking clients, ANZ Private bank edged ahead of NAB private in the client satisfaction space.
“Driving ANZ’s stellar result was a concerted effort on personalised service and providing clients with access to relevant technical specialists, service elements for which the bank’s ratings improved markedly. Their Grow Centre, in particular, has been a well received innovation,” said Guiamatsia.
Smaller business banks outscored the majors in HNW’s assessment of value for money
Two in five HNWs are business owners and a quarter of them turn to NAB for their business banking services. Collectively, the Big Four controls an 80% market share of business banking services.
| Top seven business banks(by primary relationships) | Main business bank in 2014 | % of business banking clients who have used them in 2014 |
| NAB | 23% | 25% |
| CBA | 21% | 32% |
| ANZ | 18% | 23% |
| Westpac | 13% | 24% |
| Macquarie | 4% | 11% |
| St George | 3% | 7% |
| Bendigo and Adelaide | 3% | 6% |
When it comes to assessment of value for money, the smaller players rank far ahead in the league table. The top five business banks, by clients’ rating for value for money were:
| Business bank | Proportion rating as very good | Proportion rating as good |
| Bendigo and Adelaide | 27% | 37% |
| Macquarie | 30% | 30% |
| St George | 3% | 45% |
| CBA | 9% | 40% |
| ANZ | 10% | 33% |
Bell Potter closes rapidly on Macquarie as the most used full service stockbroker among HNW investors
Macquarie Private Wealth/Private Equity remains the most used full service broking network among Australia’s HNW investors, but lost ground in 2014. Bell Potter grew rapidly to place equal second with Morgans.
| Top six full service stockbrokers(by primary relationships) | Main broker in 2014 | % of broking clients who have used them in 2014 |
| Macquarie Private Wealth | 13% | 17% |
| Bell Potter | 12% | 14% |
| Morgans | 12% | 14% |
| Ord Minnett | 10% | 11% |
| Morgan Stanley | 9% | 10% |
| JBWere | 8% | 10% |