Once considered niche, alternative assets are now a key component in the portfolios of Australia’s high-net-worth (HNW) investors, and their popularity is only growing. With 22% of HNW individuals already incorporating alternatives, wealth advisers must be prepared to meet the rising demand from sophisticated clients seeking access.
Beyond the traditional stocks and bonds portfolio, HNW investors are recognising the value of assets such as private equity, hedge funds, real estate, and commodities, each offering distinct risk-return profiles. These investments are proving to be effective diversifiers against market volatility while presenting the potential for attractive risk-adjusted returns.
A gap between investor demand and adviser action
Despite this growing interest, a disconnect remains between investor demand and adviser implementation. While 22% of HNW investors already hold alternatives in their portfolios, 41% of advisers report that alternatives make up less than 20% of their total client AUM.
Bridging this gap is a valuable opportunity. Demand is accelerating, with 85% of HNW investors who already allocate to alternatives planning to invest more in the next 12 months. Notably, these investors are also more engaged, with 56% of alternative investors maintain an ongoing adviser relationship, compared to just 36% of those with traditional portfolios.
This growing interest is especially strong among younger HNW individuals, offering advisers a unique chance to attract and retain the next generation of clients.
As demand continues to rise, advisers must embrace smarter strategies and technologies that support the integration of alternatives and position themselves to deliver more tailored, future-ready solutions.
Stay relevant in a rapidly changing financial environment and provide sophisticated, robust advice that truly meets the evolving needs of high-net-worth investors.
Download 'The Alternative Advantage' eBook to discover:
- What's driving HNW investors to allocate to alternative assets.
- Why investors who allocate to alternatives are more engaged that those who don't.
- Who or what is influencing HNW decisions around alternatives allocation.
- The market dynamics and the generational shift driving allocation.
- Key barriers to the allocation of alternatives, from both the adviser and investor.
Praemium’s award-winning platform simplifies complex portfolios and whole-of-wealth reporting, trusted by top firms across Australia. Contact us to discover how we can elevate your service for high-net-worth clients.
