Why the Federal Budget Just Made HNW Financial Advice More Complex and More Valuable

In Summary

• Labor’s proposed capital gains tax reforms have triggered urgent demand for strategic advice among high-net-worth clients, with an estimated $4.4 trillion in HNW wealth currently underserved by financial planners.
• Only one quarter of high-net-worth Australians currently use a financial adviser, but growing complexity around tax, succession and multi-entity structures is driving that number higher.
• Advisers who can deliver sophisticated strategic planning for HNW clients are positioned to capture significant opportunity as the policy environment tightens.

 

The federal budget has a way of reshuffling priorities quickly. For financial advisers working with high-net-worth clients, Treasurer Jim Chalmers’ proposed overhaul of the capital gains tax discount has done exactly that.

Overnight, clients who previously felt their affairs were well in hand are asking new questions. Structures that once made sense need reviewing. And the gap between clients who have access to quality strategic advice and those who do not is becoming more consequential by the day.

What Has the CGT Proposal Actually Changed?

The proposed reform targets the CGT discount, a mechanism that has long underpinned investment decision-making for high-net-worth individuals, companies and trusts. The detail is still being worked through, but the direction of travel is clear: the tax treatment of capital assets is becoming less favourable, and the planning required to manage that effectively is becoming more complex.

As CoreData chief executive Andrew Inwood put it at the 2026 SIAA Conference, wealth is slippery. Unlike wages, it moves quickly, and the proposed CGT changes are already prompting a wave of calls from investors and business owners asking what to do next. His estimate is that around 90 per cent of affected clients now feel they need professional guidance.

That is a significant shift in a segment that has historically been underadvised.

How Large Is the HNW Advice Gap?

New research from the Stockbrokers and Investment Advisers Association, Praemium and CoreData puts the scale of the opportunity in sharp relief. Australia’s high-net-worth population controls an estimated $4.4 trillion in wealth. Yet only one quarter of those individuals currently work with a financial adviser.

The research also found that nearly 80 per cent of advisers surveyed focus on HNW clients, and 64 per cent report that these clients make up at least half of their client base. Almost 80 per cent of those firms manage individual client portfolios exceeding $6 million, and around one quarter serve client bases that are at least 50 per cent wholesale investors.

The picture that emerges is of a profession that is already deeply embedded in the HNW segment, but one where the complexity of client needs is growing faster than the advice being delivered.

Why Does HNW Complexity Demand a Different Kind of Planning?

A high-net-worth client’s financial position rarely resembles the straightforward PAYG income and single-account structure of a standard retail client. Multiple entities, discretionary trusts, private companies, investment properties, share portfolios, business interests and succession considerations all interact with each other in ways that require careful, coordinated planning.

The proposed CGT changes add another layer to that complexity. A client holding appreciating assets across several structures now faces a materially different set of questions about timing, disposal strategy, entity restructuring and intergenerational transfer. Those questions cannot be answered with generic advice. They require financial modelling, scenario analysis and a clear-eyed view of how decisions made today will play out across years and tax cycles.

Australia is also entering the largest intergenerational wealth transfer on record. The acceleration of the baby boomer cohort through retirement and estate planning means more HNW clients are simultaneously managing their own retirement income, protecting accumulated wealth and structuring its transition to the next generation. Each of those tasks carries distinct planning implications, and they rarely sit neatly in separate buckets.

Why Is Strategic Planning the Key Differentiator for HNW Advisers?

For advisers working with HNW clients, the value proposition has always been strategic rather than transactional. The budget has made that distinction sharper.

Clients who previously deferred complex planning conversations are now motivated. The combination of proposed tax changes, market volatility and the sheer scale of wealth moving through the system has created a moment where the cost of inaction feels real.

Advisers who can bring rigorous financial modelling, entity-level analysis and whole-of-wealth thinking to those conversations are not simply providing a service. They are providing clarity in a period of genuine uncertainty, and that is something HNW clients will pay for.

The data from the SIAA research reflects a profession already operating at this level. The shift underway is advisers broadening their role to support more of the client balance sheet, more consistently, across a larger and more complex client base.

Are the Conditions Right to Grow an HNW Advice Practice Now?

The advice gap in the HNW segment has persisted for years despite strong wealth growth. A combination of regulatory change, tax complexity and an unprecedented intergenerational transfer is now compressing that gap from multiple directions at once.

For advisers with the capability to deliver sophisticated strategic planning, the federal budget has not created a problem. It has created a runway.

 

FAQs

What are the proposed CGT reforms in the 2026 federal budget?

Treasurer Jim Chalmers announced a proposed overhaul of the capital gains tax discount on Budget night 2026. The reforms are intended to reduce the tax advantages currently available on capital gains, particularly for investors and entities holding appreciating assets. The full legislative detail is still being developed, but the changes are expected to have a material impact on investment structuring, asset disposal timing and entity planning for high-net-worth individuals and businesses.

Why do so few high-net-worth Australians use a financial adviser?

Research from CoreData, Praemium and the SIAA suggests the gap stems from a combination of factors, including a historical perception that wealth management and financial planning are separate disciplines, limited availability of advisers with genuine HNW expertise, and the complexity of HNW client structures outpacing the capacity of the advice market to serve them. With $4.4 trillion in HNW wealth and only 25 per cent advice penetration, the opportunity to close that gap is substantial.

What is a wholesale investor?

Under Australian law, a wholesale investor is generally a person or entity that meets certain financial thresholds, such as having net assets of at least $2.5 million or gross income of at least $250,000 per year for the previous two financial years. Wholesale investors are subject to fewer regulatory protections than retail clients, on the basis that they have the financial sophistication to assess investment risks independently. Many HNW clients qualify as wholesale investors.

How do CGT changes affect clients with multiple entities?

Clients who hold assets across discretionary trusts, companies, self-managed super funds and personal names each face different CGT treatment depending on the entity type and the nature of the asset. A change to the CGT discount rate or eligibility criteria affects each structure differently, which is why comprehensive modelling across the entire balance sheet is essential rather than considering each entity in isolation.

What does Mutual Plans do for advisers working with HNW clients?

Mutual Plans provides paraplanning and strategic support services to wholesale financial advisers, with a particular focus on complex HNW client situations. This includes financial modelling, scenario analysis and strategic document preparation for clients with sophisticated structures including multiple entities, diverse income sources and significant investable assets.

 

Glossary of Terms

Capital Gains Tax (CGT): A tax on the profit made from selling or disposing of an asset that has increased in value. In Australia, individuals and trusts that hold an asset for more than 12 months are currently eligible for a CGT discount, reducing the taxable gain. The proposed 2026 reforms target this discount.

CGT Discount: A reduction applied to capital gains for assets held longer than 12 months. Individuals currently receive a 50 per cent discount, while complying superannuation funds receive a 33.3 per cent discount. Companies are not eligible for the discount. The proposed reforms may alter these rates or eligibility criteria.

Discretionary Trust: A legal structure in which a trustee holds assets on behalf of beneficiaries, with discretion over how income and capital are distributed. Commonly used by HNW families for asset protection, tax planning and succession purposes.

Entity Structuring: The process of determining the most appropriate legal and tax structures to hold assets and conduct business activities. For HNW clients this typically involves a combination of personal ownership, companies, trusts and superannuation funds, each with distinct tax and legal characteristics.

Financial Modelling: The use of structured quantitative analysis to project the financial outcomes of different planning scenarios. In the context of HNW advice, financial modelling is used to assess the impact of decisions around asset disposal, entity restructuring, retirement income drawdown and intergenerational transfer.

High-Net-Worth (HNW): A term used to describe individuals with significant investable assets, typically defined as net investable assets of $1 million or more, excluding primary residence. In the Australian advice context, HNW clients often have total wealth well in excess of this threshold and complex multi-entity financial structures.

Intergenerational Wealth Transfer: The movement of accumulated assets from one generation to the next, typically through inheritance, gifting or estate planning structures. Australia is currently experiencing its largest such transfer on record, driven by the ageing baby boomer population.

Paraplanning: The provision of research, analysis and documentation support to financial advisers. Paraplanners assist in preparing statements of advice, financial models and strategic recommendations, allowing advisers to focus on client relationships and complex planning work.

SIAA (Stockbrokers and Investment Advisers Association): The peak industry body representing stockbroking and investment advice firms in Australia. The SIAA advocates on policy, professional development and market structure issues affecting the investment advice profession.

Wholesale Adviser: A financial adviser who works primarily or exclusively with wholesale investors. Wholesale advisers typically operate in a less prescriptive regulatory environment than retail advisers, reflecting the assumed sophistication of their client base, and often deliver more complex, strategy-focused advice.

Whole-of-Wealth Advice: A comprehensive approach to financial planning that considers all of a client’s assets, liabilities, income sources and financial structures together, rather than addressing individual products or accounts in isolation. Particularly relevant for HNW clients whose financial positions span multiple entities and asset classes.