Challenges and Opportunities for the Wealth Sector in Australia

Synopsis:

This report is the result of WealthInsight’s extensive research covering the HNWI population and Wealth Management industry in Australia.

Summary:

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.

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

Reasons To Buy:

- The WealthInsight Intelligence Center Database is an unparalleled resource and the leading resource of its kind. Compiled and curated by a team of expert research specialists, the database comprises up to one hundred data-points on over 100,000 HNWIs from around the world. It also includes profiles on major private banks, wealth managers and family offices in each country. With the database as the foundation for our research and analysis, we are able obtain an unsurpassed level of granularity, insight and authority on the HNWI and wealth management universe in each of the countries and regions we cover
- Comprehensive forecasts to 2015

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

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
Table 1: HNWI Wealth Band and Group Definitions 2
Table 2: Australian State Statistics 7
Table 3: SFOs - State Comparison and Potential 15
Table 4: SFOs - Sector Comparison and Potential 17
Table 5: SFOs – Top 10 SFOs by AuM 20
Table 6: Major Companies in the Financial Services Industry in Australia 21
Table 7: SGD to USD Moving Annual Average Exchange Rate, 2006–15 39
Table 8: Real GDP Growth Rate, 2006–15 40
Table 9: GDP Per Capita, 2006–15 41
Table 10: Gross Savings as a % of Real GDP, 2006–2015 42
Table 11: Domestic Market Capitalization, 2006–10 43
Table 12: Housing Price Index, 2006–10 44
Table 13: Commodity Indices, 2006–15 45
Table 14: Foreign Direct Investments, 2006–2015 46
Table 15: Investments of FIIs in Equity Products, 2006–10 47
Table 16: Inflation Rate, 2006–15 48
Table 17: Repo Rate, 2006–15 49
Table 18: Balance of Payments, 2006-10 50
Table 19: Stock Market Performance, 2006–10 51
Table 20: HNWI Wealth vs. GDP Ratio, 2006–10 52
Table 21: Capital Formation as % of GDP, 2006-15 53
Table 22: Disposable Income as % of GDP, 2006-15 54

List of Figures
Figure 1: HNWI Wealth Band Definitions
Figure 2: HNWI Wealth Sector Market Attractiveness, 2007-15
Figure 3: HNWIs – Australia vs. RoW and Asia-Pacific
Figure 4: SFOs – Geographical location by Region
Figure 5: SFOs – State Comparison
Figure 6: SFOs – By Sector
Figure 7: SFOs – Sector Comparison
Figure 8: SFOs – Retail and Fashion vs. Real Estate
Figure 9: SFOs – Basic Materials and Manufacturing vs. the Services Sector
Figure 10: Australia Wealth Management Industry – Behavioral Mapping, 2011
Figure 11: Australian Wealth Management Industry – Porters Five Forces
Figure 12: AUD to USD Moving Annual Average Exchange Rate, 2006–15
Figure 13: Real GDP Growth (%), 2006–15
Figure 14: GDP Per Capita, 2006–15
Figure 15: Gross Savings as a % of Real GDP, 2006–2015
Figure 16: Domestic Market Capitalization, 2006–10
Figure 17: Housing Price Index, 2006–10
Figure 18: Commodity Indices, 2006–15
Figure 19: Foreign Direct Investments, 2006–2015
Figure 20: Investments of FIIs in Equity Products, 2006–10
Figure 21: Inflation Rate, 2006–15
Figure 22: Repo Rate, 2006-15
Figure 23: Balance of Payments, 2006-10
Figure 24: Stock Market Performance, 2006–10
Figure 25: HNWI Wealth vs. GDP Ratio, 2006–10
Figure 26: Capital Formation as % of GDP, 2006-15
Figure 27: Disposable Income as % of GDP, 2006-15

Wealth Managers:

- Prime Value Asset Management Limited
- Tristone Financial Group
- AMP Private Wealth Mngmt
- JBWere
- Perpetual
- EWM Group
- Ord Minnet
- RBS Morgans
- Deloitte Private
- Investec Bank (Australia)
- Hillross Financial Services
- Bendigo Wealth
- Centric Wealth

Multi Family Office:

- BMF Asset Management
- The Family Office - Hayes Knight
- First Unity
- Fordam
- FORM - Family Office Research and Management
- GGBWealthcare (GGB)
- Goodman - Private Wealth Advisors
- LBW
- Levi Kim & Associates Pty Ltd
- Mancell
- MGI
- Morrows - Morrows Private Wealth
- Mutual Trust
- Myer Family Office Ltd.
- Nexia ASR Family Office
- Phillips Financial
- Pitcher Partners
- Vos Family Office
- Mutual Trust Pty Ltd
- Lowenhaupt Global Advisors
- ROI Group

International Private Banks:

- Morgan Stanley Smith Barney
- UBS
- Deutsche Bank Private Wealth
- Credit Suisse
- Citi Global Wealth
- HSBC Private Bank
- Bank of America/Merrill Lynch

Local Private Banks:

- Macquarie Private Bank
- ANZ Private Bank
- Commonwealth Private
- Westpac Private Bank
- NAB Private Wealth
- BT Financial Group

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