Applied Financial Planning

Understanding Australian advice clients better

BY   |  FRIDAY, 31 MAY 2024    8:00AM

The following article comprises an excerpt from the white paper Understanding Australian advice clients better, published by Netwealth in 2024.

Segmenting can provide additional insight for firms trying to define what is important to their clients. In this article, we dive into the three key client segments identified in the annual Advisable Australian research conducted by Netwealth, and investigate their driving needs.

Meet the advised Australians

Advice firms are continually developing their value proposition and service offerings to meet the needs and wants of their clients.

However, with client demands always evolving, firms may need to direct their efforts to the activities that will deliver the most value. Segmenting clients beyond life stage can be a great help for advice firms trying to define what is important to them.

Netwealth's segmentation was based on age and affluence. Firstly, client personas were divided into emerging (45 years and under) versus established (over 45 years).

Then they were further segmented into affluence by wealth, which was measured on income, debt levels, property values and household assets.

Three segments were identified that could be of importance to financial advice firms.

  • The Emerging Affluent-fondly referred to as 'millennials with money'.
  • The Established Affluent-the typical Generation X (Gen X) or Baby Boomer (Boomer) client.
Together, these two segments of clients represent one-quarter of Australians over 18 years old yet control close to half of Australia's household wealth.
  • The Established Mass-important as they are the largest single segment, representing 41% of the Australian population over 18 years, controlling around one-third of household wealth.