Wealth in Australia: Sizing the Market Opportunity

by Sameer Joshi or 01-Oct-2018

Although the outlook for Australian wealth growth remains steady, there are significant uncertainties in the financial sector. This includes a series of destabilizing factors in the international economic world order, mainly due to the US’s continued attempts to remake international trade in a way the country sees as more advantageous to its own interests. Meanwhile an enquiry into the domestic banking sector has demonstrated significant abuses of clients by the major banks – and the consequences of these findings may be severe. But despite the potential need for caution there is also considerable opportunity.

 Critical Success Factors -

  • Target the top tier of investors − Targeting investors in higher asset bands will prove lucrative in Australia, given that investors with more than A$10m in liquid assets will post the highest growth over the forecast period.
  • Consider your alternative investment proposition – We forecast a strong increase in demand for alternative investments, and wealth managers need to be ready to meet this demand. The increase in passive index funds (with their low fee structure) is something that must be contended with.
  • Provide access to offshore markets – While Chinese individuals are not allowed to move more than $50,000 a year out of the country, access to better investment options and global diversification benefits provide a strong incentive for investors to hold some of their wealth abroad.
  • Digital assistance – In order to provide truly tailored and personalized assistance, the use of financial analytics will become more prevalent. Wealth managers should ensure they are at the forefront of this movement.