Research: Why are HNW individuals skipping financial advice?
/New research by Investment Trends and Praemium shows that high-net-worth individuals are increasingly avoiding financial advisers and doing their own investing and wealth building and management.
The 300-page report based on surveys of 7,500 investors shows that many HNW individuals are using an adviser to validate their own decisions and research, rather than as a primary source of advice.
Key findings include:
Sixty per cent of Australian HNWs only use an adviser to validate their own investment decisions, up from 52 per cent last year
Nearly 40 per cent of HNWs seek advice only when they need it, while 38 per cent say they can manage their own finances
Thirty-three per cent of those surveyed said the main reason they chose to avoid advisers was because of “advisers’ conflicts of interest”
Thirty-one per cent said they found advice too expensive
Thirty per cent said they lack confidence in advisers’ expertise
A poor experience in the past was a key role in their decision for 28 per cent of respondents
When HNWs did seek advice, a financial adviser was the most popular vehicle (15 per cent, down from 18 per cent in 2021), accountants (9 per cent, unchanged from 2021), and full service stockbrokers (8 per cent, down from 9 per cent last year)
HNWs prefer to have a single source of wealth management via a digital platform, with 53 per cent still using a spreadsheet
In 2022 Australia had 625,000 HNWs controlling $2.82 trillion in investable assets, with about 70 per cent of that to be passed down to the next generation. HNWs are using advisers for inheritance and estate planning strategies, to reduce tax obligations, and for retirement planning and investment strategy reviews.
