Australia trails in key HNW metrics | Australian Markets

Australia has recorded a modest increase in its high web value (HNW) population, considerably outpaced by world growth figures, Capgemini’s latest World Wealth Report 2025 has revealed.

Australia at this time hosts practically 334,000 people with a HNW, an increase of 0.5%, the 29^th version of the Report revealed.

The world increase in HNW people was 5 occasions better than Australia’s, at 2.6%, which was matched by Asia-Pacific’s growth figures, at 2.7%. APAC’s increase was propped up by a important increase in the HNW populations of India and Japan.

North America recorded the most important positive aspects, with the HNW population rising by 7.3%, buoyed by a beneficial rate of interest surroundings and powerful equity market returns by 2024.

In distinction, Europe (-2.1%), Latin America (-8.5%) and the Middle East (-2.1%) noticed declines in their HNW populations, every weighed down by macroeconomic challenges and stagnation in their home economies.

Of this Australian whole, 30,240 people had been categorised as ‘mid-tier millionaires’, with wealth between US$5 million (AU$7.7 million) to US$30 million (AU$46.2 million); Australia’s high tier, these with more than US$30 million in property, totals 2,450 people.

The whole worth of HNW people in Australia elevated by 3.3% to US$1.087 trillion (AU$1.68 trillion), additionally beneath the worldwide charge of 4.2%, totalling US$90.47 trillion (AU$139 trillion).

The great wealth switch was the defining pattern of the report, with an estimated US$83.5 trillion (AU$128 trillion) set to change palms over the subsequent 20 years between the Baby Boomers and their descendent generations.

“This segment has needs and expectations which significantly diverge from previous generations, presenting challenges and opportunities for wealth management firms,” the report wrote.

According to the report, this handover will unfold in three phases: 30% of HNWIs will obtain an inheritance by the top of 2030, 63% will inherit wealth by the top of 2035, and 84% by 2040.

In Australia, by 2030, 22% of HNWIs will obtain an inheritance, rising to 69% in 2035 and 80% by 2040.

As youthful traders take charge of their elders’ gathered wealth, asset mixes and investment priorities are additionally quickly evolving. The report confirmed the notably elevated presence of different investments, together with personal equity and cryptocurrencies, in HNW people’ portfolios.

As of January 2025, alts investments now signify 15% of HNW people’ portfolios.

“They are willing to take more risks to expand their wealth – allocating capital to higher growth asset classes and niche product offerings, notably by 61% of millennial and Gen Z HNWIs,” the report learn.

“The great wealth transfer will be a defining moment for the industry. Despite global wealth on the rise, 81% of inheritors plan to switch firms within one to two years of inheritance,” mentioned Kartik Ramakrishnan, chief govt of Capgemini’s Financial Services Strategic Business Unit.

“Potentially losing these unsatisfied clients is going to create significant risk for the global wealth management sector.”

Unsatisfied advisers current ‘flight risk’

In a survey of the worldwide adviser group, the report additionally confirmed a:

• important curiosity in personal equity and cryptocurrencies, with 88% of advisers observing a better demand for different property amongst youthful traders.
• demand for tailor-made or concierge companies similar to luxurious journey, medical care, and safeguarding towards cyber threats, as high non-financial value-added companies.
• desire for digital interactions, with advisers rating digital platforms with a holistic consumer view and actionable insights as important to successfully servicing next-gen HNW people, adopted by clever automation.

Despite the demand for digital, nonetheless, one-in-three advisers expressed dissatisfaction with their corporations’ lack of digital capabilities.

In addition, 62% of next-gen HNWIs say they’d comply with their adviser in the event that they moved to a totally different firm.

“Altogether, this directly impacts retention, as advisors struggle to engage these digital-native clients,” the report learn.

Capgemini stories that the industry is on the “cusp of a talent shortage amid an unprecedented transfer of wealth to Gen X, millennial, and Gen Z inheritors”.

“In the next 12 months, one in four advisers plan to be on the move, with a majority transitioning to a competitor firm and a few starting their own ventures.”

Additionally, the report revealed, round 20% of advisors plan to retire by 2035, with 48% planning to retire by 2040.