Stephen Furness

HUB24 has announced the launch of a new whitepaper, ‘Directing the matrix: meeting the advice needs of high net worth clients’, providing unique insights into what it takes for advisers to successfully service the nation’s growing number of high net worth (HNW) investors.

The whitepaper outlines key trends among these savvy investors, which represent a growing segment of the Australian population, often with complex needs that require professional financial advice.

The HNW segment in Australia is sizable and continues to grow with Investment Trends estimating 635,000 HNW investors collectively poured more than $2.98 trillion AUD into investments in 2023, up 3% from the previous year. This has primarily been driven by profits from direct shares and investments. Furthermore, the data reveals 66 percent of new entrants are more likely to be unadvised, representing a significant opportunity for financial advice practices.^[1]

While the average age of HNW investors is currently 60, data shows younger generations are contributing to growth in the segment. Those under 40 are estimated to make up 14% of Australia’s ultra HNW investors, with net assets exceeding $30 million USD.^[2]

The whitepaper leverages insights from financial advisers, who have successfully built an advice proposition for HNW clients.

Treysta Wealth Management Executive Director Mark Nagle says a lot of their clients in the HNW segment are self-made entrepreneurs and business owners.

“Our youngest client is in his 30s. He ran a tech startup and sold it to a big overseas company, so experienced a multi-million liquidity event.

“When you’re talking about HNW clients, the challenge is not generally a financial one, it’s an emotional one. They have built considerable wealth through a high-powered career or through owning a successful business. For years, they were usually the smartest, most powerful person in the room. In retirement, that all stops.

“That’s why we pivoted to a lifestyle planning approach. Even for HNW clients, it’s not about achieving investment outcomes, it’s about achieving lifestyle outcomes.”

To some extent, the money motivations of HNW clients mirror those of many other investors – saving for retirement, the desire to make a social impact, preserving wealth, passing assets on to family members and leaving a legacy. However, the quantum of the amounts involved increases the number – and complexity – of solutions available.

MGD Wealth Director Stephen Furness says HNW clients have often reached a level of financial security, so their investment journey is quite different to retail clients.

“These days it takes a lot more than a million dollars of investable assets to be in that position. Our clients were highly successful before they ever came to see us. Our role isn’t to make them more successful, it’s to steward their success and their wealth, to help them transition to the next phase of their lives.”

Cruz Family Office Specialist Nat Daley says on one level, the underlying issues for which the wealthy seek advice are the same as everyone else including getting out of debt, saving for something, and helping to manage cashflow.

“But for HNW investors, the quantum and complexity are obviously amplified 100 times, especially around family. Clients have come to us with some incredibly messy situations. Helping untangle them has undoubtedly brought marriages and families closer.”

Older HNW clients have ridden a wave of enormous asset growth over their lives in both equity and housing markets. It is these clients who are at the very centre of the enormous intergenerational wealth transfer that we will see over the next two decades.

The rising economic power of female investors is also a standout trend around the world that is redefining the way firms are approaching this segment. Research shows that females hold around a third of all Australian wealth and are expected to grow their wealth around 40% faster than males. Furthermore, by 2030, females are projected to manage two-thirds of all household wealth.^[3]

Elston Head of Philanthropic Services Susan Chenoweth says philanthropy can be a galvanising force, creating cohesion across multiple generations of a family.

“Every individual is motivated differently – giving can be rational and emotional. We find younger clients are generally more motivated to support environmental and social causes, and they also like to get more involved as volunteers. But across the board, we are seeing more focus on gender equity and diversity in giving. Mental health is also an area all generations are interested in.”

Contrary to popular belief, HNW individuals are not risk takers attracted to complex investment strategies, preferring more conservative and cautious strategies and more traditional domestic asset classes.

Wealth transfer for these clients can often involve the transfer of not only significant financial assets but also business ownership stakes, hence an important role of advice in this segment is to protect wealth and smooth the path for its transfer in the face of potentially challenging family dynamics.

HUB24’s Chief Growth Officer Chesne Stafford says the benefits of technology and automation is a game changer for advice practices as they seek to create efficiencies and improve productivity to meet the growing needs of their client base.

“Unsurprisingly, HNW clients take more time to serve. Research shows 86% of HNW clients want personalised offerings, and 91% of them say service quality, rather than expertise or investment returns, is the most important criterion when selecting a financial adviser.^[4]

“The advisers who successfully serve the HNW segment act as connectors, augmenting their own deep technical expertise with a network of the very best leaders and thinkers across a broad range of specialist disciplines including investing, tax, law, accounting and philanthropy.

“By making available technology solutions that increase efficiencies and productivity, we can empower advisers to deliver scalable solutions that meet the evolving needs of their clients.”

In response to the demand for better reporting tools to support client engagement and enable a complete view of client wealth, new data feeds and automation capabilities were recently added to the HUB24 platform, enabling advisers to obtain a holistic view of their clients’ asset allocation. The new features compliment HUB24 Present, a market-leading reporting capability co-created with advisers that enable them to customise presentations in real-time and increase client engagement.

This month, HUB24 also unveiled several changes linked to demand for HNW clients, such as the ability to trade unlisted domestic fixed income securities and direct foreign currency.

Download HUB24’s whitepaper, ‘Directing the matrix: meeting the advice needs of high net worth clients’.

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Kathryn Creasy

The Financial Planning Association of Australia (FPA) has announced the winners of the 2021 FPA Awards.

Now in its ninth year, the FPA Awards recognises exceptional financial planners, paraplanners, university students and FPA Professional Practices from across Australia.

The awards also celebrate the individuals and businesses who go above and beyond to deliver outstanding results for clients and give back to the community.

The winner of the coveted “FPA CERTIFIED FINANCIAL PLANNER® Professional of the Year Award” is Kathryn Creasy CFP® of Capital Partners in West Perth. The award acknowledges Kathryn’s outstanding approach to providing comprehensive financial planning advice to her clients but also her passion for mentoring those within her team and the broader profession.

FPA CEO Dante De Gori CFP® said: “Kathryn exemplifies our FPA membership as a modern professional financial planner. She is a shining example to all those that are considering a career in financial planning and the life-changing difference our work can make with a client.”

The winner of the “FPA Professional Practice of the Year Award” is Sydney-based Apt Wealth (NSW). The judges commented that it’s not easy to establish and be recognised as one of the 2021 AFR BOSS Best Places to Work in financial services.

Winning the “FPA Financial Planner AFP® of the Year Award” for 2021 is Leanne Bielik AFP® of 2020 Wealth PTY LTD (VIC). The judges noted that Leanne has paved the way to help those in need in the community get the help and support only a professional financial planner can provide them throughout the pandemic. Leanne also spends time in online communities supporting single mothers and clients who have had previous poor advice outcomes to get back on track.

The winner of the “FPA Advice Innovation Award” is Daniel Thompson AFP® of FINNACLE (NSW). The award was introduced last year to recognise members who have automated their advice process or used technology in new ways to engage with clients and/or deliver advice. Daniel has taken a blank piece of paper approach and an agile mindset to create a novel subscription based advice service. Through testing and improving constantly, Daniel and his team have created an innovative, affordable and easily accessible advice business for the benefit of his clients.

The “FPA Paraplanner of the Year Award” was given to Andrew Mann CFP® of Tupicoffs (QLD). The judges commented that Andrew is an example of what it is to excel in one’s craft. This award is a celebration of Andrew’s career and excellence in paraplanning, particularly his ability to be engaging, pulling complex threads together in such a way that embraces the client’s capacity to absorb information, and deal with matters that are important to the client.

The winner of the “FPA University Student of the Year Award” is Nicole Gardner of Kaplan Professional (VIC). Nicole has forged successful careers in journalism and in the banking sector. Inspired by the financial hardship that a close relative endured, she was determined to become a financial planner and to work hard to ensure that women and those entering aged care are financially educated and set up for success. She is now achieving a high standard of academic achievement whilst working in the financial planning profession and supporting a family.

The winner of the “FPA Community Service Award” supported by the Future2 Foundation is Peter O’Connell CFP® (VIC). The judging panel said that Peter has been a strong supporter of the Aboriginal Literacy Foundation in the Ballarat and Western Victoria area. For the past 15 years he has provided financial literacy education advice to the Indigenous community. He also supports the Aboriginal Literacy Foundation with their accounting and financial planning requirements.

The FPA gratefully acknowledges the time and expertise provided by the 2021 FPA judging panel:

Certified Financial Planner of the Year
Alison Henderson CFP®
David Sharpe CFP®
Marisa Broome CFP®

Financial Planner AFP of the Year
Michelle Tate-Lovery CFP®
Ben Marshan CFP®
Nat Daley AFP®

FPA Professional Planner of the Year
Diana D’Ambra
Julie Matheson CFP®
Neil Kendall CFP®

FPA Advice Innovation Award
Ben Marshan CFP®
Andy Marshall
Fraser Jack

FPA Paraplanner of the Year Award
William Johns CFP®
Vicky Ampoulos
Mark O’Toole CFP®

FPA University Student of the Year
Anne Palmer FPA
Diana Bugarcic – TAFE NSW
Vicky Ampoulos

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