Super top of mind for young HNWIs

For high-net-worth individuals (HNWIs) under the age of 30, a good retirement savings plan appears to be a key priority as they seek assistance with their superannuation, according to research.

The 2023 State of Wealth Report from LGT Crestone and CoreData, which surveyed over 1,000 high-net-worth and ultra-high-net-worth individuals (UHNWIs), has found almost 40 per cent of young HNWIs rank super as a top priority. They also flagged health insurance as an important consideration. 

In comparison, 33 per cent of HNWIs between 30 and 39 years of age ranked life insurance as most important.

Meanwhile, for the older cohorts above the age of 50, retirement planning was an understandable priority.
Overall, most HNWIs, or investors with $1 million in investable assets, are seeking assistance with their investment (20 per cent) and retirement decision making (19 per cent), followed by non-SMSF super (14 per cent) and SMSF super (12 per cent).

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Michael Chisholm, chief executive at LGT Crestone, observed wealthy investors are looking to trusted financial advisers to help navigate major macro changes, characterised as a period of ‘reset’.

“HNW and UHNW individuals recognise the importance of trusted financial advice, arguably more so in periods of unstable market conditions,” Chisholm said.

“Also given the difficulty in finding information, research and access to alternative and private markets investments, the adviser plays a critical role in guiding HNW clients around these decisions. This ‘guiding hand’ principle cannot be understated.” 

The research also found that despite a push for advice from banks and super funds, almost half (46 per cent) of HNWIs favour advice from IFAs.

Older HNWIs between 50 and 59 years of age display the most keenness for IFAs (64 per cent), followed by HNWIs over the age of 60 (57 per cent). 

Around 20 per cent want to work with a bank-aligned adviser and 18 per cent want to work with a company that is aligned with a bank or institution.

Just 10 per cent of HNWIs overall would want advice from their super fund. Of this, those aged over 60 are most likely (18 per cent) to seek advice from a super fund, presumably as they approach their retirement age.

Those between 30 and 39 years of age were least likely (6 per cent). 

Interestingly, the report noted that nearly two-thirds of HNWIs do not have a wealth transfer plan in place, despite the majority having intentions to develop one. 

Around 38 per cent of respondents said their top concern is that their wealth might be misused or poorly managed, closely followed by tax implications (37 per cent).

Chisholm considers that a major obstacle for such clients is in figuring out where to begin. 

“The wealth transfer process is one that is deeply personal and unique to each family. We see a significant need for assistance from trusted advice professionals to help introduce the discussion and broaden it to include more family members,” he said.