There is no single best investment for a high net worth individual, because the right portfolio depends on your financial goals, risk tolerance, time horizon, tax position and the structures you use to hold your wealth. At this level, how you hold an investment can matter as much as the investment itself, especially when managing tax efficiency, asset protection and long‑term legacy planning.
This guide explains how high‑net‑worth investing works, the main asset classes, the role of alternative investments, and why structure, tax planning and independent advice matter.
What counts as high net worth in Australia
A high net worth individual is commonly defined as someone with at least A$1 million in investable assets, excluding the primary residence. This is not a legal definition, as some institutions use different tiers, but it’s the most widely used benchmark.
Ultra‑high‑net‑worth individuals are commonly referenced at A$30 million+ in investable assets, reflecting significantly more complex structures, tax considerations and estate planning needs.
High net worth status is about liquid assets, not lifestyle or income. It includes personal assets such as investment portfolios, business interests, commercial property, fixed income, private equity and alternative investments.
How investing changes at a high net worth level
Investing changes meaningfully once your net worth reaches seven figures. The biggest shifts are:
Diversification across more asset classes than traditional portfolios, including private equity, venture capital, hedge‑fund‑style strategies, commercial property, fixed income and alternative investments.
Access to wholesale and sophisticated investor opportunities are unavailable to retail investors. Under current Corporations Act thresholds, wholesale / sophisticated investor status generally requires a qualified accountant’s certificate confirming net assets or gross income above the legislated tests.
Greater tax and estate complexity, making structure, tax planning and asset protection essential.
Tailored risk management, including liquidity planning, insurance coverage, family governance and succession considerations.
High‑net‑worth individuals often require bespoke investment management and a wealth strategy aligned to long‑term wealth, legacy planning and risk mitigation.
The main asset classes for a high net worth portfolio
No single asset class is “best” in isolation. Each one plays a different role in a well‑constructed, high‑net‑worth portfolio; balancing capital growth, income generation, liquidity, tax efficiency and long‑term risk management. The real strength comes from how these assets work together, not individually.
High‑net‑worth investors typically draw from a broader mix of asset classes than everyday investors because they have more flexibility, longer time horizons, and greater capacity to manage complexity. Here’s how the major asset classes contribute to a diversified strategy:
Australian and global equities: in many instances, this is the engine room for long‑term capital growth. Equities help portfolios outpace inflation and build wealth over decades. They also provide dividend income, franking credits (in Australia), and exposure to different sectors and geographies.
Property: both direct and listed. Property offers rental income, potential capital appreciation, and diversification away from sharemarket volatility. High‑net‑worth investors often use property for leverage, tax planning, and intergenerational wealth transfer.
Fixed income: government bonds, corporate bonds and cash‑like instruments. These assets provide stability, predictable income and downside protection. They’re essential for smoothing returns and managing liquidity needs.
Alternatives: private equity, venture capital, infrastructure, hedge funds, private credit and real assets. Alternatives can improve diversification because they behave differently to traditional markets. They’re often used to reduce volatility, access specialised opportunities and enhance long‑term returns.
Cash and term deposits: the liquidity layer. Cash provides optionality: the ability to act quickly, fund opportunities, manage short‑term expenses, and protect capital during market downturns.
Commodities and precious metals: used selectively for inflation protection and diversification. Gold, for example, can act as a hedge during periods of geopolitical risk or market stress.
Each asset class has a different job. Equities grow wealth. Property anchors long‑term value. Fixed income stabilises. Alternatives diversify. Cash protects. Commodities hedge. A high‑net‑worth portfolio blends these roles to create a structure that can withstand market cycles, support lifestyle needs, and grow across generations.
Growth assets: equities, managed funds, ETFs and separately managed accounts
Australian equities offer capital growth and franking credits, which improve tax efficiency for many high‑net‑worth clients. International equities broaden global diversification and reduce reliance on domestic market fluctuations.
Managed funds, ETFs and separately managed accounts provide professional investment management, liquidity and exposure to traditional investments and thematic strategies. Their trade‑off is market volatility and the need for disciplined risk tolerance.
Real assets: direct and commercial property
Direct ownership of commercial or industrial property can provide rental income, inflation protection and long‑term capital growth. The trade‑off is illiquidity and concentration risk, especially when personal assets or business interests dominate the portfolio.
Defensive and alternative assets: fixed interest, bonds, private equity and alternatives
Fixed income, corporate bonds and government bonds provide stability, income and lower volatility. Private equity, venture capital and other alternative investments offer exclusive investment opportunities with high‑growth potential, typically accessed via wholesale or sophisticated investor status. Their trade‑off is illiquidity and longer investment horizons.
Alternative investments can smooth returns during periods of market volatility and help diversify beyond traditional asset classes.
Why investment structure and tax efficiency matter as much as the asset
At high net worth level, structure determines tax outcomes, asset protection and estate planning, often more than the underlying investment. The right structure depends on your tax position, financial objectives and generational wealth plans.
Trusts and investment companies
Discretionary or family trusts provide flexibility in distributing income, managing tax liabilities and protecting assets. Investment companies allow retained earnings to be taxed at the company rate, used by some high‑net‑worth individuals for long‑term wealth building and asset protection.
Superannuation and SMSFs
Superannuation remains one of Australia’s most tax‑efficient environments. Self‑managed super funds offer control, asset protection and estate planning benefits. Current rules apply additional tax treatment to very large super balances, so strategic planning is essential. But for Ultra Hight Net Worth individuals, these can still be suitable structures for managing tax and asset protection.
Investment Bonds
Investment bonds are used by some high‑net‑worth investors for long‑term tax‑effective investing, with tax paid inside the bond. They can complement a broader wealth management plan including tax management and asset protection.
Tax efficiency and franking credits for high net worth investors
Tax efficiency matters because it compounds over time, and at high‑net‑worth level the way you manage tax can influence long‑term outcomes as much as the underlying investment. High‑net‑worth individuals typically use a combination of strategies to reduce tax drag and improve after‑tax returns.
Tax‑efficient approaches include:
Using franking credits on Australian dividends to reduce double taxation and improve after‑tax income
Managing capital gains tax timing, especially when rebalancing or realising large positions
Asset location, holding the right asset in the right structure (trusts, companies, Superannuation / SMSFs, investment bonds) to optimise tax outcomes
Tax‑loss harvesting, selling selected assets at a loss to offset gains elsewhere in the portfolio
Tax‑deferred or tax‑advantaged accounts, allowing investments to grow without immediate tax on gains
For high‑net‑worth individuals, tax planning is essential to optimise investment structures, manage tax liabilities and preserve capital across generations. It’s a core part of building a tax‑efficient, diversified portfolio and making informed investment decisions.
Diversification and managing risk at scale
A high‑net‑worth portfolio needs diversification across asset classes, geographies and ownership structures, not just across a handful of shares. At this level, concentration risk often comes from a single business, commercial property or other personal assets that dominate net worth, making deliberate risk management essential.
Effective risk management includes:
Correlation management: ensuring assets don’t all move in the same direction during market fluctuations
Liquidity planning: maintaining liquid assets to meet obligations, seize opportunities and manage market volatility
Insurance coverage: protecting wealth from unforeseen risks, lawsuits and business interruptions
Rebalancing: adjusting the portfolio to maintain your intended risk profile over time
Asset protection structures: using trusts, companies and other legal frameworks to protect assets from creditors and support succession planning
High‑net‑worth individuals often require bespoke risk mitigation solutions that integrate investment strategy, asset protection, liquidity, insurance and long‑term wealth planning into a single cohesive framework.
Investing and estate and generational wealth planning
At this level, investment decisions and estate planning are linked. Structures such as trusts, Superannuation / SMSFs and ownership arrangements determine how assets pass to future generations.
Estate planning includes wills, trusts, family governance and succession planning. With over $6 trillion expected to transfer in Australia by 2050, a solid estate plan prevents disputes, manages estate taxes and ensures wealth transfers according to your wishes.
Philanthropy, including donor‑advised funds, can provide tax benefits, strengthen family bonds and support long‑term legacy planning and charitable giving.
Common mistakes high net worth investors make
High‑net‑worth investors face unique challenges, and several recurring mistakes can undermine long‑term wealth, tax efficiency and asset protection.
Common pitfalls include:
Over‑concentration in a single asset, such as a business, a property or personal assets, which amplifies exposure to market fluctuations and reduces diversification
Choosing investments without considering the holding structure, missing opportunities for tax efficiency, asset protection and estate planning
Chasing returns without a clear wealth strategy, leading to mismatched risk tolerance, poor liquidity planning and inconsistent investment decisions
Neglecting estate planning, which can create disputes, tax liabilities and unintended outcomes for future generations
Underestimating tax implications and asset protection needs, especially when managing capital gains, business interests or complex personal assets
Each of these mistakes can reduce long‑term wealth, increase tax liabilities and weaken your overall risk management and wealth strategy.
Why and conflict free advice matters
At the high-net-worth level, the stakes are higher and the complexity is greater. That makes the alignment of your adviser just as important as the investments you choose.
Product-aligned advisers can be incentivised toward in-house offerings, creating potential conflicts of interest that may shape recommendations. High-net-worth individuals typically navigate complex structures, tax considerations, asset protection needs, and multi-generational planning. In this environment, advice must be genuinely centered on your financial objectives, not on product retention or distribution targets.
Solace Financial does not manufacture financial products. Our guidance is built around your goals, your structures, and your long-term wealth strategy. Every recommendation is made with your best interests at the center, free from product KPI quotas or institutional incentives.
Take the next step with an independent Brisbane adviser
A complimentary initial consultation gives you clarity on your financial future, your investment options and your broader wealth management plan, with no obligation. It’s an opportunity to understand how your structures, tax position and long‑term goals fit together.
To explore a tailored wealth strategy built around your objectives, reach out to Solace Financial and book a complimentary initial consultation.
Frequently asked questions
What do high net worth individuals invest in?
High‑net‑worth individuals typically build diversified portfolios across multiple asset classes to balance capital growth, income, liquidity and risk management. This often includes commercial, industrial and residential property; direct equities across Australian and international markets; managed funds and ETFs; fixed income and corporate bonds; private equity; and other alternative investments. The right mix depends on your financial goals, time horizon, risk tolerance, tax position, and the structures used to hold your investable assets.
What alternative investments do high net worth individuals invest in?
High‑net‑worth individuals often access private equity, private credit, venture capital, hedge‑fund‑style strategies and other alternative investments. These opportunities are typically available only to wholesale or sophisticated investors, providing access to private markets, exclusive investment opportunities and strategies designed to diversify beyond traditional investments.
How much money do you need to be considered a sophisticated or wholesale investor in Australia?
Under the current Corporations Act rules, wholesale or sophisticated investor status generally requires a qualified accountant’s certificate confirming that you meet the legislated net‑assets or gross‑income thresholds. These thresholds determine access to private equity, venture capital and other wholesale‑only investment options. ASIC has proposed changes, so staying informed is important.
Do high net worth investors pay less tax on their investments?
High‑net‑worth investors don’t automatically pay less tax, but they often achieve better outcomes through structure, asset location, and strategic tax planning. Trusts, Superannuation / SMSFs, companies and tax‑efficient investments can help manage capital gains tax, improve tax efficiency and reduce tax liabilities over time. The tax result comes from planning, not from wealth alone.
Should high net worth individuals use a financial adviser?
It’s not mandatory, but the complexity of tax, investment structures, asset protection, risk management, estate planning and alternative investments means high‑net‑worth individuals often benefit from professional, conflict‑free advice. A skilled adviser helps align your investment strategy with your financial objectives, manage tax implications and structure your wealth for future generations.
Book a free consultation
Take comfort in your financial future with Solace Financial
