HNW market holds steady during pandemic

The amount of high-net-worth investors in the Australian market remained steady during 2020 despite the financial hardship associated with the Covid-19 pandemic according to researcher Investment Trends.

The company’s 2020 High Net Worth Investor Report says the amount of HNW investors – defined as those with over $1 million in investible assets outside their home and non-SMSF super – was at 485,000 in September 2020, down only slightly from 490,000 in 2019.

Both amounts are a significant increase on the 2018 figure of 460,000 HNW investors.

“The size of the Australian HNW population remains resilient despite tough market conditions at home and abroad,” said Investment Trends’ associate research director King Loong Choi.

“While the uncertain investing climate had minimal impact on market size, it has profoundly impacted the attitudes and preferences of HNW investors towards investing and advice.”

The report also revealed a significant growth in the ‘validator’ segment, described as “those who would consider using an adviser because they value a second opinion, for their access to a wide array of investments, and their technical skills” according to the researcher.

“The last 12 months saw a large shift in the perceptions of advice among HNW investors, with a sharp increase in ‘validators’ who are open to receiving financial advice (56 per cent, up from 40 per cent in 2019) and a corresponding fall in ‘self-directed’ HNWs who prefer making decisions on their own (34 per cent, down from 49 per cent),” Choi said.