Challenges and Opportunities for the Wealth Sector in Australia

2012-03-01
Published : Mar-2012

This report is a thorough analysis of Australia’s Wealth Management and Private Banking sector, and the opportunities and challenges that it faces. In addition to providing a comprehensive and robust background of the local economy, including, uniquely, detailed analysis of economic and political risks to HNWI wealth creation, the report provides robust projections of the volume and wealth of Australia’s HNWIs.

Scope

The report features:

  • Independent market sizing of Australia’s HNWIs
  • Details of the development, challenges and opportunities of the Wealth Management and Private Banking sector in Australia
  • Insights into the drivers of HNWI wealth
  • Detailed family office information and trends from 2007 to 2011
  • Insights into the drivers of HNWI wealth

Australia Wealth Sector

Published: March 2012
No. of Pages: 63

Key Highlights

  • There are just over 274,000 HNWIs in Australia, with an average wealth of US$3.1 million per person and a combined wealth of US$845 billion.
  • The number of Australia’s HNWIs increased by 8.9% (2.2% pa) over the review period (2007-2011), while total wealth grew by 0.9% (0.2% pa).
  • The number of Australian HNWIs is expected to rise by 20% (4.7% pa) from 2011 to reach over 330,000 individuals by 2015, while HNWI wealth will grow by 26% (6.0% pa) to reach US$1.1 trillion in 2015. Most of the growth in wealth will be driven by the lower-tier millionaires, whose wealth is expected to rise by over 33%.
  • Australia is one of the largest private banking centres in Asia, with AuM of US$350 billion. The local market is dominated by local wealth managers and family offices. The single family office segment alone constitutes over US$180 billion in AuM.
  • It should be noted that the size of the wealth management industry is limited by the dominant pension fund market, which makes it less necessary for core millionaires, and especially lower-tier millionaires, to use wealth managers.
  • New South Wales is home to the largest number of SFOs in Australia (39%), followed by Victoria (27%), Queensland (19%) and then Western Australia (11%).
  • Western Australia offers the greatest potential for new family offices as it has relatively few SFOs compared to its total number of UHNWIs

Table of Contents

1 Introduction
1.1 What is this Report About?

2 Executive Summary

3 Wealth Sector Fundamentals
3.1 Political Background of the Wealth Sector
3.2 Economic Background to the Wealth Sector
3.3 Benchmarking Australian Wealth in Context
3.3.1 Distribution of Wealth

4 Competitive Landscape of the Wealth Sector
4.1 Industry Structure
4.2 Family Offices
4.2.1 Multi-Family Offices
4.2.2 Single Family Offices
4.3 Leading Companies in the Wealth Management and Private Banking Industry
4.4 Wealth Management and Private Banking Industry – Behavioral Mapping
4.5 Porter’s Five Force Analysis – Wealth Management Industry
4.6 Financial Services Review
4.6.1 Foreign Banks
4.6.2 Domestic Banks
4.6.3 Superannuation funds
4.6.4 Hedge funds
4.6.5 REITs
4.6.6 Investment Management
4.6.7 Independent financial advisors
4.7 Challenges and Opportunities for the Wealth Sector in Australia
4.7.1 Regulatory Environment
4.7.2 Tax structure
4.7.3 Human resource availability for the wealth management industry
4.7.4 Philanthropy
4.7.5 Demand for Intergenerational Wealth Transfer and Younger Clientele

5 Appendix
5.1 Pertinent Regulations
5.1.1 Regulations on Banks
5.1.2 Regulations on Taxes
5.1.3 Regulations on Fund Management
5.1.4 Regulations on Foreign Investment
5.1.5 Regulations on Real Estate
5.1.6 Regulations on Foreign Investment in Real Estate
5.1.7 Regulations on Hedge Funds
5.1.8 Regulations on Wealth Management and Private Banking
5.1.9 Regulations Related to Investment and Employment
5.1.10 Regulations Related to Immigration
5.2 Additional case study
5.2.1 Superannuation fund and insurance companies: An edge over others
5.3 Key Economic Trends and Drivers
5.3.1 AUD to USD Moving Annual Average Exchange Rate
5.3.2 Real GDP Growth
5.3.3 Per Capita GDP
5.3.4 Gross Savings Rate as a % of GDP
5.3.5 Domestic Market Capitalization
5.3.6 Housing Price Index
5.3.7 Commodity Index
5.3.8 Foreign Direct Investment
5.3.9 Investments of FII’s in Equity Products
5.3.10 Inflation Rate
5.3.11 Repo Rate
5.3.12 Balance of Payments
5.3.13 Stock Market Performance
5.3.14 HNWI Wealth vs. GDP Ratio
5.3.15 Capital Formation as % of GDP
5.3.16 Disposable Income as % of GDP

6 About WealthInsight

List of Tables

List of Figures

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