Three defining trends for private wealth in 2025

Australia’s population of high-net-worth individuals is continuing to grow, putting greater demands on the wealth management industry.

Over the past 12 to 18 months, we have seen a significant shift in the way that wealthy Australians are choosing to invest and safeguard their returns.

Australia’s population of high-net-worth individuals is continuing to grow, putting greater demands on the wealth management industry.

Over the past 12 to 18 months, we have seen a significant shift in the way that wealthy Australians are choosing to invest and safeguard their returns.

One key trend is an increased appetite for private assets. Another is growing demand for more efficient and holistic wealth management services.

These changes stem from the fact that many wealthy people want a seat at the table alongside institutional investors when it comes to accessing emerging investment opportunities and technology. These trends have yet to run their course, and we expect them to further ramp up in 2025.

As a result, there are three key themes which we anticipate seeing in the year ahead, which will further the ongoing evolution of the private wealth sector in Australia: heightened investor interest in private assets; the rise of the multi-family office; and whole-of-wealth reporting becoming the industry standard.

Private markets

Firstly, the ongoing democratisation of private markets will continue to provide opportunities for high-net-worth individuals which were previously only available to institutional investors, including greater access to asset classes such as private equity, unlisted real estate and private debt.

Integro Private Wealth works with Spire Capital to assess these unlisted opportunities on behalf of our high-net-worth investor clients. Together, we have noticed more fund managers engaging with wealthy investors directly, creating a heightened need for investment review to help manage risk, liquidity and returns in clients’ overall portfolios.

A recent report from Praemium outlines that while 62 per cent of private wealth advisers are recommending alternative investments to clients, significant effort is involved for advisers to review each opportunity to understand liquidity risk and fees. Advisers surveyed also held concerns around transparency in private assets.

As demand for private assets continues, the need for private wealth advisers, particularly those with access to investment expertise in private markets, will become essential for the growing number of clients who are seeking to access the unlisted space.

Multi-family office

Over the past decade, the family office sector has faced an increasing struggle to attract and retain staff, particularly in relation to investment professionals. As new asset classes continue to emerge, particularly in private markets, this will only increase, meaning single family offices will obtain greater efficiency and economies of scale by transitioning to an outsourced multi-family office.

Put simply, an outsourced multi-family office can more cost-effectively service multiple families by allowing individual clients to access a broader range of expertise without the need to internally employ these individuals. This includes tax specialists, corporate advisers, audit services and professionals specialising in mergers and acquisitions, or specific aspects of the law.

Across the industry, there is a significant number of single family offices, particularly those that have spanned multiple generations, who do not need the rigid structure that it entails and are facing higher fees for a reduced level and range of services.

In the year ahead, we expect to see an increasing rate of single family offices transitioning into multi-family offices as issues around staff retention grow and the clients seek greater efficiency and cost reduction.

Wealth reporting

Wealth management firms, of all sizes and client types, are only just beginning to move towards whole-of-wealth reporting. This reporting structure looks at all financial aspects that a client has to accurately outline their assets, liabilities and other financial information, to paint a full picture of their financial position.

For decades, the industry standard of practice was for advice firms to only report on the assets that they managed, but we anticipate this to flip moving forward. This is due to a growing number of clients expecting that their adviser will understand and provide insights on their whole portfolio, as the ongoing digitalisation of the financial services industry has facilitated this level of oversight in other areas, such as banking.

To be done effectively, this needs to be done in two parts. The first aspect is ongoing reporting on assets, valuations and transactions, along with benchmarked asset allocation and performance figures to track growth. Secondly, it requires firms to have expertise in annual tax reporting, so that clients can see and understand their realised and unrealised gains, income and expenses, as well as tax liabilities from interest, dividends and tax liabilities.

Integro Private Wealth has spent years developing this technology, stemming from the increasing demand from clients wanting more than reporting at a platform level. For other firms, both small and large, providing this service will require significant investment in reporting and investment testing software, but we see this as a worthwhile expense for the benefit of clients.

This trend again highlights the increasing advantages of outsourcing wealth management, rather than operating a single family office, as greater efficiencies and cost reductions for reporting can be achieved through economies of scale.

With the financial advice and wealth management industries increasingly becoming more digital, with a focus on improving transparency and making information easy to access, it is clear that the ongoing shift towards whole-of-wealth reporting will continue to play out in 2025.

Justin Gilmour is managing partner at Integro Private Wealth.