Australia Wealth Management – Market Sizing and Opportunities to 2027
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Australia Wealth Management Market Overview
Affluent individuals (including HNW individuals and mass affluents) collectively held the vast majority of onshore liquid assets, highlighting the country’s high level of wealth imbalance. The equities market recorded significant volatility resulting in a decline. Additionally, inflationary pressures and supply chain disruptions across 2022 and 2023 translated into more depressed financial markets, thus impacting investor sentiment.
The Australia Wealth Management market research report will help to keep up to date with the Australian wealth management industry, looking at investors’ asset allocation by affluence bandings as well as a detailed picture of where HNWs distribute their investments. It will also assist in understanding offshore investment drivers for the mass affluent, emerging affluent, mass market, and HNW individuals.
Key Investment Preferences | · Advisory Mandates
· Discretionary Mandates · Execution-only Mandates · Robo-advisor Service · Others |
Key Investment Channels | · Advisors at Investors’ Main Banks
· Advisors at Other Banks · Investment Platforms at Main Banks and Other Banks · Independent Financial Advisors (IFAS) · Investment Management Companies · Pension Companies · Robo-Advisors |
Key Reasons for Holding Wealth Offshore | · Better Returns
· Better Investment Product Range Abroad · Tax Efficiency |
Key Asset Allocation Classes | · Deposits
· Mutual funds · Equities · Bonds |
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Australia Wealth Management Market Dynamics
In 2022, HNW investors felt the effects of the financial crisis in Australia more compared to other investor segments due to their affinity towards riskier assets such as equities. Therefore, the wealth of affluent investors invested in liquid assets increased in 2022. The weak financial growth in 2023 led to slow growth in the wealth of affluent investors in the country.
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Australia Wealth Management Market - Investment Preferences
The key investment preferences in the Australian wealth management market are advisory mandates, discretionary mandates, execution-only mandates, and taking aid of the robo-advisor service, among others. In Australia, discretionary mandates accounted for the majority share of the total managed wealth of an average Australian HNW investor in 2022. Previously investors preferred to have influence over their investment choices but now, they are increasingly seeing the appeal in handing over their investment decisions to experts.
Australia Wealth Management Market Analysis by Investment Preferences, 2022 (%)
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Australia Wealth Management Market - Investment Channels
Some of the key investment channels in the Australia wealth management market are advisors at investors’ main banks, advisors at other banks, investment platforms at main banks and other banks, independent financial advisors (IFAs), investment management companies, pension companies, and robo-advisors, among others. In 2022, independent financial advisors (IFAs) were the preferred investment channel across all affluent classes. The wide range of investments offered by this channel and services that extend beyond investment management drive the preference for IFAs.
Australia Wealth Management Market Analysis by Investment Channels, 2022 (%)
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Australia Wealth Management Market - Reasons for Holding Wealth Offshore
The key drivers to hold wealth offshore in the Australian wealth management market are better returns, better investment product range abroad, and tax efficiency, among others. In 2022, an expectation for better investment product ranges followed by anticipation for better returns were popular reasons to offshore wealth for investors. Wealth held abroad presents a challenge to wealth managers who lack offshore capabilities. To avoid losing assets under management (AUM) to offshore providers, offering a more sophisticated and diverse range of investment product range onshore is a must.
Australia Wealth Management Market Analysis by Reasons for Holding Wealth Offshore, 2022 (%)
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Australia Wealth Management Market - Asset Allocation Classes
The major asset allocation classes for HNW investors in the Australian wealth management market include bonds, deposits, equities, and mutual funds. Australia’s economy continued to grow in 2022 amid the rising inflation and cost of living. The target rates were increased by the RBA every month from May to December 2022, leading to an uncertain outlook for 2023 in the Australian economy. Tightened budgets are likely to continue, and additional mortgage and cost of living pressures are expected, largely due to constraints in the current labor market. Deposits retained the bulk of household financial wealth, with their share of liquid assets increasing in 2022 among all other asset balances.
Australia Wealth Management Market Analysis by Asset Allocation Classes, 2022 (%)
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Segments Covered in the Report
Australia Wealth Management Market Asset Classes Outlook (%, 2022)
- Deposits
- Mutual funds
- Equities
- Bonds
Australia Wealth Management Market Investment Channel Outlook (%, 2022)
- Advisors at Investors’ Main Banks
- Advisors at Other Banks
- Investment Platforms at Main Banks and Other Banks
- Independent Financial Advisors (IFAS)
- Investment Management Companies
- Pension Companies
- Robo-Advisors
Scope
• In 2022, mass affluent investors held the highest proportion of their non-superannuation wealth in equities.
• Independent financial advisors are the preferred investment channel across all affluent classes considered.
• 50% of mass affluent and 27% of emerging affluent investors hold some proportion of their wealth abroad.
Key Highlights
- In 2022, mass affluent investors held the highest proportion of their non-superannuation wealth in equities.
- Independent financial advisors are the preferred investment channel across all affluent classes considered.
Reasons to Buy
- Make strategic decisions using top-level historical and forecast data on Australia’s wealth industry.
- Identify the most promising client segment by analyzing the penetration of affluent individuals.
- Receive detailed insights into retail liquid asset holdings in Australia.
- Understand the changing market and competitive dynamics by learning about new competitors and recent deals in the wealth space.
- Discover the key digital disruptors in the country’s wealth market.
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Table of Contents
Frequently asked questions
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Which was the leading investment preference in the Australian wealth management market?
In Australia, discretionary mandates accounted for the majority share of the total managed wealth of an average Australian HNW investor.
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What was the leading reason for holding wealth offshore in the Australian wealth management market?
In 2022, an expectation for better investment product ranges was the key driver for Australian investors to offshore their wealth.
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Which was the leading asset class for HNW investors in the Australian wealth management market?
Deposits was the leading asset class for HNW investors in the Australian wealth management market in 2022.
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Which was the most preferred investment channel for HNW investors in the Australian wealth management market?
In 2022, independent financial advisors (IFAs) was the preferred investment channel for HNW investors in the Australia wealth management market.
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