Australian High Net Worth (HNW) Investor population steadies as both property and equity markets face headwinds

Dr Irene Guiamatsia

Leading research firm Investment Trends has publicly released its 2022 High Net Worth Investor Report, an in-depth study of Australian HNW’s investing behaviour, product needs and advice needs.

The latest report highlights that as we come out of a period of unprecedented asset value growth, the population of those who control over a million dollars in investable assets was 625,000 in 2022, down from 635,000 in 2021, but still much larger than 485,000 in 2020. Despite this decrease in overall population, the total level of investable assets largely held steady. Collectively, HNWs control $2.82 trillion, up from $2.72 trillion in 2021.

“Investors continue to have substantial exposure to property and direct shares, key pillars of their investment portfolio,” said Dr Irene Guiamatsia, Head of Research at Investment Trends. “Over recent years, they’ve also significantly increased their allocation to ETFs.”

The research revealed that the proportion of HNWs making substantial asset allocation changes to their portfolio has tapered for the second year in a row with just under two in five (37%) HNWs making substantial asset allocation changes to their portfolio in the year to July 2022. 37% changed at least 10% of their portfolio, compared to 41% in 2021 and a 50% record high in 2020.

“Looking ahead, HNW investors have recalibrated their investment goals in line with a more subdued outlook for the next twelve months, and increasingly more are looking to protect their wealth against a market downturn,” noted Guiamatsia. “Correspondingly, demand for asset classes is evolving, with fixed income emerging as an area of particular interest.”

Looking even further ahead, HNWs expect to pass down close to $2 trillion worth of assets to the next generation, equating to around 70% of their total assets. Financial advisers are the main port of call for inter-generational planning discussions, the most pertinent areas being tax optimisation and wealth preservation.

“This annual research always explores in a great deal of detail how product issuers, advice providers and technology providers can best support high net worth investors. This year’s report shines a light on the sharper focus HNW families are placing on wealth preservation across generations,” added Guiamatsia.