HNW investors trust advisers to navigate regulatory requirements

The May 2026 Federal Budget announcements have created uncertainty among high-net-worth investors. According to Netwealth executive general manager of private wealth and banking, Lindsay Coates, that uncertainty has influenced the biggest shift in overall trends in investor posture since Covid.

Coates expects the trends identified in Netwealth’s 2026 High Net Worth Investor Report to deepen over the course of the current financial year.

“The Division 296 tax on big super balances, changes to negative gearing and CGT, and the proposed minimum tax thresholds on discretionary trusts, are causing big shifts in the investment strategies of high-net-worth Australians,” Coates said in a statement. 

“Not surprisingly, high net worth Australians said advice from financial professionals will be the strongest driver of their investment selections this year, as they navigate regulatory changes, market volatility, interest rates, and geopolitical considerations.”

The Netwealth report, produced with research firm Investment Trends, separates HNW investors into four segments:

• Affluent investors: $1 million – $2.5 million investable capital
• Emerging high net worth investors: $2.5 million – $5 million
• Established high net worth investors: $5 million – $10 million
• Ultra-high net worth investors: $10 million – $70 million.

The report found that 64 per cent of ultra investors will follow advice from financial advisers in the next 12 months. The same applies to established investors, with 58 per cent trusting financial advisers.

“The opportunity for trusted advisers is to help their clients understand and navigate the implications of this increasingly complex environment. This is clearly recognised by high net worth and ultra-high net worth investors in particular, who said advice from financial professionals and regulatory changes will be the two strongest drivers of their investment decisions over the next 12 months,” Coates tells Professional Planner.

Ultra investors tend to respond proactively to regulatory changes.

Affluent and emerging investors are influenced more by regulatory changes and market volatility, among other points.

While the three lower segments of investors are concerned about building a sustainable income stream, the top investors are focused on preserving and protecting existing wealth, something that increased from 16 per cent of investors in 2025 to 26 per cent in 2026. There was an overall increase in interest in protecting existing wealth across all segments, but it did not make it to the top priorities of all.

Moving away from property

The research found that some investors are moving away from residential property investments and towards ETFs. Established investors have decreased their investment in residential property by 4 per cent, at the same time increasing investment in ETFs by 4 per cent.

Ultra investors however increased their residential property investment by 6 per cent and affluent investors by 9 per cent.

“This group [affluent investors] typically invests a greater share of their overall wealth into property compared to high net wealth investors and is slower to shift focus,” Coates said.

“We’re yet to see any data that shows affluent investors will follow high net wealth investors and reduce exposure to residential property. That said, given the shift in market signals since the federal budget, we’re watching closely to see if those signals are heralding a decline in residential property investment by affluent investors in FY27.”

The biggest investment increase in the ultra segment was 9 per cent in direct shares and 7 per cent in ETFs.

The established segment grew investments in direct international shares by 10 per cent and fixed income by 7 per cent.

Affluent investors increase their ETFs investment significantly by 12 per cent.

The common point between most segments, with the exception of established, was a drop in hybrid securities investments.

“A shift away from hybrid securities and toward ETFs is an example of an underlying trend toward diversification, liquidity, and implementation flexibility among high-net-worth investors in FY26,” Coates said.

“ETFs spread risk across many assets and offer more stability, higher trading volumes, and regular distributions.

“As more high net worth investors moved to decrease their risk exposure in FY26, the shift toward ETFs makes sense.”