High net worth investors fight off GFC hangovers Bank of Melbourne Private's Jonathan Ayres. The historic brand was resurrected by Westpac two years ago to provide a product specifically targeted at Victorians. JONATHAN Ayres calls it "post-traumatic investment disorder." That's the term he uses to describe the affliction suffered by his high net worth clients at Bank of Melbourne Private during the past three years in the aftermath of the global financial crisis. It has fed a seemingly insatiable appetite for term deposits, hybrids and subordinated debt-style securities, and -- somewhat surprisingly -- commercial and industrial property. "Their sentiment has been bumping around from negative to marginally positive for past three years," says Ayres, who became the first head of the bank's private client business almost two years ago after shifting from National Australia Bank, where he spent more than 10 years in senior roles, including head of financial planning for NAB Private and as a regional executive. Individuals and families have still felt comfortable because it has not been worth risking the loss to get the return. And that is fundamentally different to the previous 15 years, when we all had a greater risk appetite and a better attitude towards growth investments. Ayres's clients each have an investment portfolio worth more than $1 million and not including the family home or superannuation, and an annual income more than $250,000. Despite the volatile investment environment, he says Bank of Melbourne Private has been growing dramatically and increasing market share. It has been the same for the bank across a range of retail and commercial products. The historic brand was resurrected by Westpac two years ago to provide a product specifically targeted at Victorians, whom Ayres says are traditionally "more conservative by and large than other Australians." We are relatively pleased with our progress. We have a very long-term view of the role we would like to play for Victorians over time. We are very much hitting our milestones but we still have a lot to do. We think we have the right double-digit growth rate on our revenues and our client growth," he says. We are probably more worried about growing too quickly. Ensuring we continue to deliver to the right types of clients is just as important as the growth rate. While the bank has made inroads during tough times, it is well positioned to benefit from any upswings. The latest data from its Investor Sentiment Indicator report for the period between August 23 and September 5 reveals that high net worth investor sentiment is turning more optimistic. HNWIs have improved confidence in the future of business conditions, an attitude further enhanced by the Coalition's win in last month's federal election, and are considerably more positive the Australian economy will continue to grow across the next quarter. Ayres says the responses to the survey support the view of the bank. We have a pretty optimistic view on the outlook for the Australian economy and specifically the Victorian economy. But we also recognise we are in the middle of this structural shift away from certain industries and into others," he says. The Australian dollar's fall during the past three months also has been welcomed. By and large, a higher Australian dollar has been concerning for our client base. Our client base is very Victorian-centric, it is where we are, it is the thing we do. Ayres says the most intriguing asset class favoured by his clients has been property. Despite the chill winds of the GFC, he says the attitude towards property has remained fairly resilient. "We have been hearing from our clients that they are increasingly investing in commercial property and specialist industrial property," Ayres says. We have done a lot more commercial lending over the past two years for the purposes of passive investment in a family or clients' investment portfolio. A small office, small factory, but with good fundamentals and once again chasing that yield. The latest Investor Sentiment Indicator report confirms that this confidence remains despite improved sentiment towards equities, with more than three in five HNWI respondents (62.4 per cent) believing residential property will perform better in the next quarter. Ayres says the bank is also playing a key role for family clients as money transitions across generations. There is a more active conversation between family groups on how to make that happen. And particularly around the right way for families to commit to philanthropy. That is one of the bigger changes within families," he says. A lot of families are looking at this as a way to stay together once the first generation is no longer around. It is also a way for them to engage with their family's wealth before they get it. It is a way some families are approaching their second and third-generation's financial education.