financial advice, Retirement, SMSF

SMSFs preferred by HNW clients

HNW high net worth SMSF superannuation retirement

SMSFs are still the optimal retirement savings vehicle for high net worth individuals, with choice, control and flexibility with complex estate planning strategies the key considerations.

SMSFs remain a popular retirement savings vehicle for individuals in the high net worth (HNW) category, driven by the desire to control their investments and estate planning, according to integrated platform provider Hub24.

The “Directing the matrix: meeting the advice needs of high net worth clients” white paper released today revealed that while having control was a key consideration for wealthy individuals when deciding to establish an SMSF, this did not mean they chose to carry out the operations of the fund.

The white paper noted while many HNW individuals preferred the control and flexibility of an SMSF, most of the investment management was outsourced to professionals, such as wealth management firms.

This was consistent with findings that wealthy individuals were more focused on preserving their wealth rather than chasing it, with optimising tax treatment and asset protection among the key concerns.

Of those surveyed who expressed an interest in estate planning as a major consideration for how they managed their wealth, 55 per cent had unmet financial advice needs.

Additionally, the white paper noted 66 per cent of new entrants into the HNW category were less likely to have consulted a financial adviser.

Hub24 chief growth officer Chesne Stafford said HNW clients preferred a more personal approach to meeting their often complex financial needs and financial advisers would be well-placed to seek expertise outside the field and employ the use of technology to meet their clients’ needs.

“Unsurprisingly, HNW clients take more time to serve. Research shows 86 per cent of HNW clients want personalised offerings and 91 per cent of them say service quality, rather than expertise or investment returns, is the most important criterion when selecting a financial adviser,” Stafford noted.

“The advisers who successfully serve the HNW segment act as connectors, augmenting their own deep technical expertise with a network of the very best leaders and thinkers across a broad range of specialist disciplines including investing, tax, law, accounting and philanthropy.

“By making available technology solutions that increase efficiencies and productivity, we can empower advisers to deliver scalable solutions that meet the evolving needs of their clients.”

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