HNW investors to favour direct equities

Advisers focus resources on shares

Victoria Papandrea

By Victoria Papandrea
Tue 16 Jun 2009

High net worth investors are likely to have the strongest product demand for shares over the next two years.

Australia’s high net worth (HNW) investors will have the majority of their money invested in direct equities over the next two years, according to a new survey by Datamonitor.

HNW investors are expected to have up to a quarter of their total investment portfolio in shares by 2011, the survey found.

Wealth managers servicing the financial needs of HNW individuals expect more than 90 per cent of their clients will demand direct equity investments over the period.

While many investors have lost money in shares over the last 18 months, the demand for equities from HNW clients is set to increase as signs of a market recovery begin to emerge, Datamonitor wealth analyst David Lalich said.

“If the stock market continues to rally this year we should see a wave of new investment from HNW individuals, and while many will have learnt lessons from the equity crash, ultimately this will not discourage them,” he said.

“These are typically opportunistic individuals that want exposure to the best opportunities for growth in the market.”

With client demand expected to be so strong in the area of direct equities, the survey found 44 per cent of wealth managers expect to focus their resources into these investment products over the next two years.

A smaller percentage of wealth managers surveyed said they would focus on developing other investment areas such as property funds, capital-protected funds, exchange-traded funds and currency trading.