Advice critical to support HNW investors’ appetite for alternatives
New research from Praemium has revealed a surge in appetite for alternative assets. Just under a quarter of Australia’s high-net-worth (HNW) investors (22%) are already allocating to the asset class with a significant proportion planning to invest further or enter the alternatives market in the next 12 months.
According to the nationwide study, many are using them to access diversification, inflation protection and returns less correlated with public markets. Amid a cautious economic climate, investors are moving beyond traditional asset classes to build broader more resilient portfolios.
While private equity remains a common alternative holding, growing interest is emerging in areas such as infrastructure, water rights, venture capital and hedge funds. For those already holding alternative assets, 85% plan to increase their allocation in the next 12 months. Notably, 46% of HNW investors who do not currently invest in alternatives are considering doing so in the next 12 months.
The research highlights that HNWs are becoming more proactive in sourcing these investments, with many leveraging a diverse mix of professionals and digital platforms. HNW investors are not navigating this shift alone. Around 70% of respondents had engaged with financial professionals in the past year, with 84% of those engaged opting to work with financial advisers.
For advisers, this growing demand comes with significant opportunity. Many HNW clients are looking for help navigating risks, understanding liquidity and return profiles, and integrating alternatives into their broader portfolio strategy.
“While private markets have faced renewed scrutiny and valuation resets in recent months, wealthy investors continue to see alternatives as a strategic component of their portfolios,” said Denis Orrock, Chief Strategy Officer at Praemium. “Platforms play a key role in helping advisers access the growing range of alternative assets while providing the administration, reporting, and execution support to implement them effectively. The significant growth in funds allocated to alternatives on the Praemium platform, coupled with growing interest in our Spectrum solution, clearly signals that advisers are actively seeking platform partners with specialised expertise to support this dynamic asset class.”
The research also points to an ongoing education gap. Nearly half of respondents reported that they lacked familiarity with the range of alternative investments available. This signals a clear opportunity for advisers and platforms to step in with accessible insights, better transparency, and more structured access pathways.
“There’s a real opportunity for advisers to lead the conversation, particularly now,” added Denis Orrock. “Clients want to understand how these assets perform in different market cycles, and they’re looking to their advisers to filter opportunities and provide clarity. Advisers who can bridge the access and education gap on alternatives will be well positioned to add value and differentiate their offer.”
While current conditions may test investor conviction, the longer-term trend is clear: alternatives are becoming a core pillar of wealth portfolios. Advisers who engage early and guide clients through the volatility will be best placed to build trust and differentiate their offering.