Wealth Management in Australia

2012-03-06
Published : Mar-2012

The Australian wealth management industry is dominated by Australia’s big four banks, and the drive for economies of scale and regulatory developments are expected to increase industry consolidation. The market is expected to grow considerably, but growth will mainly be fueled by the mining boom, making some states more attractive than others.

Features and benefits

  • Build your customer targeting strategy using in-depth HNW demographics and needs analysis based on Datamonitor’s annual Global Wealth Manager Survey.
  • Assess your competition through detailed profiles of notable players, including the customer targeting, marketing and product strategies they employ.
  • Size your potential client base using Datamonitor’s proprietary data, presenting the number of affluent individuals by liquid asset band to 2015.

Australian Wealth Management Market

Published: February 2012
No. of Pages: 102

Request Sample


Highlights

The Australian economy remains strong, and the financial services and mining sectors have grown significantly, while the retail and manufacturing sectors have struggled. The affluent population is expected to show the most rapid growth in Western Australia, Queensland, and the Northern Territory.

The typical Australian HNW customer is male and between 51 and 65 years old. He has most commonly amassed his wealth through entrepreneurship or earned income, and he allocates more than half of his portfolio to cash or near-cash products and approximately a quarter to equities.

The Australian wealth management market is dominated by large domestic banking groups. The drive for economies of scale by big dealer groups has led to increased industry concentration over the last few years, making it harder for new entrants to enter the market. The FOFA reforms are expected to further increase industry concentration.

Here are some portions of Table of Contents of this report:

EXECUTIVE SUMMARY
Sizing and forecasting the affluent population in Australia
Australia is in an enviable position economically
Future of Financial Advice regulations set to change the advisory landscape
By 2015 Australia’s affluent population will account for 22.1% of the total population
The typical Australian HNW investor is male, between 51 and 65 years old, and accumulated his wealth through entrepreneurship or earned income
There are fewer HNW investors below 51 years of age in Australia than in Asia Pacific, making retirement planning more of a priority
The majority of HNW individuals have amassed their fortunes through entrepreneurship, and will thus appreciate products that complement their often time-constrained lifestyles
Within two years, equities will see the biggest reallocation in Australian HNW portfolios
Competitor developments in Australian wealth management
The wealth management market in Australia is dominated by the country’s big four banks, and further industry consolidation can be expected
There has been an increasing amount of consolidation in the wealth management industry
Westpac is expected to increase its client base in Asia Pacific and the Australian states affected by the mining boom

SIZING AND FORECASTING THE AFFLUENT MARKET IN AUSTRALIA
Key macroeconomic overview
Macroeconomic trends and performance
Real GDP highlights the affluence of Australia’s relatively small population
Inflation is forecast to be moderate, increasing the viability of fixed income products as a means of wealth preservation
Long-term and short-term interest rates both declined in the global financial crisis
Australia’s low Gini coefficient coupled with a high GDP per capita indicates a large mass affluent market
Stock market capitalization has suffered due to external shocks facilitated by Australia’s open capital markets
Regulation of wealth management in Australia
Industry regulators
Industry associations
Recent regulatory developments
Sizing the onshore affluent population
The affluent market reached a size of 2.8 million adults in 2011 and is set to grow further
The different asset bands have been growing at variable rates, making some segments more attractive to wealth managers than others
Forecasting the onshore affluent market
The affluent population is expected to grow at a faster rate between 2012 and 2015 than in previous years
Growth of liquid assets held by the affluent population is expected to be spread equally over all asset bands

HNW CUSTOMERS IN AUSTRALIA
The typical Australian HNW investor is male, between 51 and 65 years old, and accumulated his wealth through entrepreneurship or earned income
There are fewer HNW investors below 51 years of age in Australia than in Asia Pacific, making retirement planning more of a priority
Women constitute a significant proportion of the HNW population in Australia
The majority of HNW individuals have amassed their fortunes through entrepreneurship, and will thus appreciate products that complement their often time-constrained lifestyles
Australian HNW individuals’ portfolios mainly consist of cash or near-cash products, but a shift toward equities is expected within the next two years
In broad asset class terms, Australian HNW individuals have the largest proportion of their portfolio in cash or near-cash products
Detailed asset class analysis shows Australia HNW individuals have the most invested in deposit savings, which can be attributed to higher interest rates and moderate inflation
Within two years, equities will see the biggest reallocation in Australian HNW portfolios
There is high demand for cash management among Australian HNW individuals, but execution-only management is set to become increasingly important
There is low demand for asset management among Australian HNW individuals
There will be increasing demand for execution-only management within the next two years, indicating HNW individuals’ discontent
Personal loans and mortgages are the preferred products of Australia’s HNW investors
Demand for margin lending products is expected to increase significantly over the next two years
There is high demand for tax planning services in Australia
The demand for ancillary services is not expected to change within the next two years
Australian HNW individuals are open to new investments but have a lower than average knowledge of financial products
Australian HNW individuals have limited knowledge of financial products, making personnel that can effectively explain complex products invaluable
A high premium is placed on face-to-face contact, making it important to have a presence outside of Sydney
Consequently, regular phone conversations are the standard in Australia
Australian investors display a high degree of loyalty to their wealth manager
Australian HNW individuals tend to work with numerous wealth managers
The majority of Australian HNW individuals hold 31–50% of their portfolio with one wealth manager
Customer referrals are the most effective means of customer acquisition
COMPETITOR DEVELOPMENTS IN AUSTRALIAN WEALTH MANAGEMENT
Introduction
Business models of Australian wealth managers
The Australian banking system is based on a universal banking concept
Asset managers tend to be affiliated with larger financial institutions
Family offices are well-established, albeit somewhat more niche players in the HNW market
Competitor trends
There has been an increasing amount of consolidation in the wealth management industry
The Future of Financial Advice reforms are expected to further accelerate industry consolidation
Staff shortages will lead to increased labor costs
Key competitors in Australian wealth management
The competitive overview reveals a market crowded with international and local players
Competitor profile: AMP
Competitor profile: ANZ
Competitor Profile: CBA
Competitor profile: NAB
Competitor profile: Westpac Banking Corporation

List of Tables

Table: Key Australian macroeconomic data
Table: Number of mass affluent individuals by asset band (000s), 2006–11
Table: Number of HNW individuals by asset band (000s), 2006–11
Table: Value of liquid assets held by the mass affluent population in Australia ($bn), 2006–11
Table: Value of liquid assets held by the HNW population in Australia ($bn), 2006–11
Table: Number of mass affluent individuals by asset band (000s), 2012–15
Table: Number of HNW individuals by asset band (000s), 2012–15
Table: Value of liquid assets held by the mass affluent population in Australia ($bn), 2012–15
Table: Value of liquid assets held by the HNW population in Australia ($bn), 2012–15
Table: The 16 locally owned Australian banks
Table: Asset distribution in the family office sector
Table: Major players in Australia’s wealth management industry
Table: ANZ financial data
Table: CBA financial data
Table: NAB financial data
Table: Westpac financial data

List of Figures

Figure: Entrepreneurship and earned income represent the most common form of wealth accumulation for Australian HNW individuals
Figure: Australia has the fifth largest economy in Asia Pacific
Figure: The Australian economy has not entered into recession since the early 1990s, meaning many individuals are unfamiliar with its potential effects on the country and their wealth
Figure: Inflation is expected to remain at moderate levels
Figure: Strong demand for government bonds will drive the long-term interest rate below the short-term interest rate
Figure: Australia has one of the lowest Gini coefficients in the region
Figure: Stock market capitalization peaked in 2010 before giving poor returns in 2011
Figure: The affluent market has seen robust growth in numbers over the last half decade
Figure: The number of mass affluent individuals in Australia decreased slightly in 2011
Figure: The number of HNW individuals in Australia peaked in 2010
Figure: Australian mass affluent individuals held a total of $442.3bn in liquid assets in 2011
Figure: The value of total liquid assets held by the HNW population was $223.5bn in 2011
Figure: There are forecast to be 3,725,100 Australian mass affluent individuals in 2015
Figure: The number of HNW individuals will post an AAGR of 8.4% between 2012 and 2015
Figure: Assets held by the Australian mass affluent population are expected to record a CAGR of 7.8% over the forecast period
Figure: Assets held by the Australian HNW population are expected to record a CAGR of 8.8%
Figure: The majority of HNW individuals are above 51 years old in Australia
Figure: Women account for almost 40% of the Australian HNW population
Figure: Westpac positions its brand as the bank of choice for women
Figure: Entrepreneurship and earned income represent the most common form of wealth accumulation for Australian HNW individuals
Figure: Australian HNW investors allocate more than half of their assets in cash or near-cash products
Figure: High interest rates make deposit saving an attractive form of investment
Figure: There will be increasing demand for equities over the forecast period
Figure: Australian HNW individuals are catered for in every category
Figure: Cash management is an extremely popular service in Australia
Figure: Execution-only asset management will become the most popular service
Figure: Mortgages and personal loans are in high demand in Australia
Figure: The demand for margin lending is expected to increase significantly
Figure: There is high demand for tax planning services among HNW individuals
Figure: The demand for ancillary services is not expected to change
Figure: Australian HNW individuals are open to new investment ideas
Figure: Australian HNW individuals value personal relationships
Figure: Wealth managers talk to their HNW clients on the phone once a month
Figure: Australian HNW investors are loyal to their wealth managers
Figure: Almost 90% of HNW investors allocate 31–50% of their portfolio to one wealth manager
Figure: Referrals are the most powerful method of acquiring new customers
Figure: FUM and profit after tax and abnormals of Australia’s big four banks
Figure: CBA holds more than one quarter of households deposits in the retail sector as of June 2011
Figure: The majority of FUM is managed by foreign owned companies
Figure: AMP’s Horizon Academy
Figure: AMP’s business structure
Figure: ANZ employs 54,280 people worldwide
Figure: ANZ’s business structure
Figure: ANZ Private Bank network
Figure: CBA business structure
Figure: CBA’s FUM structure
Figure: Colonial First State sponsors the Sports Performer Awards
Figure: NAB’s business structure
Figure: MLC & NAB Wealth has 1,864 advisors
Figure: NAB uses flying banners as part of its break-up campaign
Figure: 37% of assets managed by BTFG are in Australian equities
Figure: Westpac’s business structure
Figure: Westpac’s private banks
Figure: Westpac’s private bank network
Figure: Global Wealth Managers Survey 2011 geographic coverage

Filed in: Banking & Finance, Wealth Management
More Reports
Title Price Buy Now

New Zealand Wealth Management: HNW Investors 2019

New Zealand Wealth Management: HNW Investors 2019 Summary This report, based on our proprietary Global Wealth Managers Survey, analyzes the investing preferences and portfolio allocation of New Zealand's high net worth (HNW) individuals. It profiles the average HNW investor in the country and looks at which management mandates are favored. It examines the allocation of HNW investors' portfolios in different asset classes and how this is expected to develop in the future. Additionally, it analyzes HNW investors' propensity to invest offshore and their preferred booking centers and asset classes. Finally, it explores product and service demand among New Zealand HNW investors. New Zealand HNW investors - who skew heavily towards professional and entrepreneurial males - show strong demand f......
$3450

PESTLE Insights: Macroeconomic Outlook Report – Mexico

PESTLE Insights: Macroeconomic Outlook Report - Mexico Summary Five major federal entities in Mexico generate approximately 44.6% of the country's GDP and comprise 38.6% of the country's population as of 2017, according to the OECD. The mining, manufacturing and utilities sector contributed 24.8% to the gross value added (GVA) in 2018, followed by wholesale, retail and hotels, and financial intermediation, real estate and business activities which contributed 22.3% and 20.5%, respectively. According to MarketLine, the three sectors are expected to grow by 4.3%, 5.4% and 4.6%, respectively, in 2019. Scope - According to the Logistics Performance Index by the World Bank, Mexico's rank improved from 54th in 2016 to 51st in 2018 (out of 160 countries). - The Mexican government plans to in......
$500

FinTrack: September 2019

FinTrack: September 2019 Summary Every month, FinTrack showcases the latest innovations from financial services providers around the world. Each innovation is assessed and rated on key criteria, providing you with valuable insight. The provision of financial services is constantly evolving, with new technology having a particularly significant impact. Innovations such as digital delivery, AI, biometrics, and robo-advice are enabling providers around the world to offer new and improved services to customers that will improve the way they manage their finances. The growing availability of these technologies is also making it easier than ever for new entrants to develop their own propositions and challenge the established providers. Scope - Amazon to introduce new biometric payment solut......
$1295

Competitor Profile: M-Pesa

Competitor Profile: M-Pesa Summary M-Pesa is a mobile-based fund-transfer and micro-level banking service available to customers of Safaricom, Kenya's largest mobile network. Introduced in 2007, the service has become a primary channel for fund transfers in the country. Originally developed as a low-cost microfinance loan repayment system, due to its rising popularity it was extended as an open platform to remit funds and make consumer payments. This was largely a result of factors such as the high cost of remitting funds through banks, a lack of banking facilities, low card penetration, minimal card acceptance infrastructure, and the high costs involved with dealing with cash in Kenya. Users can register for the service at an authorized M-Pesa agent and transfer money from an M-Pesa a......
$350

Enterprise Tech Ecosystem Series: Swiss Re

Enterprise Tech Ecosystem Series: Swiss Re Summary Swiss Re provides wholesale reinsurance, insurance, and risk transfer solutions. The company provides reinsurance products for casualty, property, aviation, agriculture, trade credit, surety, political risk, life and health, engineering, and marine. It offers commercial insurance solutions such as accident and health insurance, cyber insurance, financial and professional liability insurance, and property and business interruption insurance. Swiss Re also acquires and manages open and closed life and health insurance businesses. The company serves insurance companies, mid- to large-sized corporations, policyholders, and the public sector. It operates through a network of brokers and offices across the Americas, Asia, the Middle East and A......
$1295

PESTLE Insights: Macroeconomic Outlook Report – Spain

PESTLE Insights: Macroeconomic Outlook Report - Spain Summary Four major autonomous communities of Spain generated around 60.96% of the GDP and were home to 58.91% of the population in 2018 More than 85% of inward FDI flows to Spain in 2018 originated from EU nations. Community of Madrid received 85.2% of the total FDI inward flows to Spain in 2018. Financial intermediation, real estate and business activities contributed 22.9% to the gross value added (GVA) in 2018, followed by wholesale, retail and hotels (19.5%), and mining, manufacturing and utilities (17.7%). In nominal terms, the three sectors are expected to grow by 3.4%, 3.6% and 3.4% respectively in 2019. Scope - According to the World Bank's logistics performance index (LPI), transport and logistic infrastructure in Spain im......
$500

PESTLE Insights: Macroeconomic Outlook Report – France

PESTLE Insights: Macroeconomic Outlook Report - France Summary Four major regions of France generated around 57.2% of the country's GDP and comprised 47.8% of the country's population in 2017 European countries were the largest source of FDI inflows into France in 2018. Financial intermediation, real estate and business activities contributed 30.6% to the gross value added (GVA) in 2018, followed by mining, manufacturing and utilities (13.7%), and wholesale, retail and hotels (13.2%). In nominal terms, the three sectors are expected to grow by 3.1%, 2.6% and 2.9%, respectively, in 2019. Scope - As per the World Bank's logistics performance index (LPI), transport and logistic infrastructure in France was unchanged over the last two years with a rank of 16th out of 160 countries in 2016......
$500

Israel Reinsurance: Key trends and Opportunities to 2023

Israel Reinsurance: Key trends and Opportunities to 2023 Summary GlobalData's "Israel Reinsurance: Key trends and Opportunities to 2023", report provides a detailed outlook by product category for the Israeli reinsurance segment. It provides values for key performance indicators such as premium accepted, premium ceded and cession rates, during the review period (2014-2018) and forecast period (2018-2023). The report also analyzes distribution channels operating in the segment, gives a comprehensive overview of the Israeli economy and demographics, and provides detailed information on the competitive landscape in the country. The report brings together GlobalData's research, modeling, and analysis expertise, giving reinsurers access to information on segment dynamics and competitive ad......
$3999

Germany Wealth Management: Market Sizing and Opportunities to 2022

Germany Wealth Management: Market Sizing and Opportunities to 2022 Summary Based on our proprietary datasets, this report analyzes Germany's wealth and retail savings and investments markets, with a focus on the HNW segment. This includes overall affluent market size (both by the number of individuals and the value of their liquid assets) as well as a breakdown of liquid vs. illiquid HNW holdings. The report also provides an analysis of the factors driving liquid asset growth, including a breakdown and forecast of total retail savings and investments split by asset classes including deposits, mutual funds, equities, and bonds. Germany's affluent segment (comprising high-net-worth [HNW] and mass affluent individuals) has experienced robust growth in recent years. HNW investors in Germany......
$3450

Israel Life Insurance: Key trends and Opportunities to 2023

Israel Life Insurance: Key trends and Opportunities to 2023 Summary GlobalData's "Israel Life Insurance: Key trends and Opportunities to 2023", report provides a detailed outlook by product category for the Israeli life insurance segment. It provides values for key performance indicators such as written premium, claims paid, penetration and total investment income during the review period (2014-2018) and forecast period (2018-2023). The report also analyzes distribution channels operating in the segment, gives a comprehensive overview of the Israeli economy and demographics, and provides detailed information on the competitive landscape in the country. The report brings together GlobalData's research, modeling, and analysis expertise, giving insurers access to information on segment d......
$3999
We use cookies to deliver the best possible experience on our website.
By continuing to use this site, or closing this box, you consent to our use of cookies. To learn more, visit our Privacy Policy