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Wealth in Australia: Sizing the Market Opportunity

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Summary
 
Compared to previous years, the Australian wealth market expanded at a slightly lower (but still impressive) rate in 2015, with economic concerns having a negative effect on performance. Weak equity market conditions and economic growth are also expected to contribute to lower growth in 2016, before the market bounces back in the following years thanks to returning economic strength. Between 2015 and 2019 liquid assets held by affluent individuals are forecast to record a compound annual growth rate (CAGR) of 8.5%, representing a sizable opportunity for wealth managers operating in the country. Yet there is notable regional disparity within Australia in terms of wealth distribution; while the east accounts for the majority of assets, growth is typically found in the capital state and the north.
 
 Key Findings
 
 - At the end of 2015, of the approximately 17.9 million adults living in Australia, 26.1% (or 4.7 million) could be considered affluent.
 
 - While expanding at a slightly slower pace than in previous years, wealth market growth in Australia still dwarfed other developed markets in 2015, and wealth held by affluent retail investors is forecast to record a CAGR of 8.8% between 2015 and 2019.
 
 - While Australias stock market struggled in 2015, generous dividend payouts and a friendly tax system have seen retail equity holdings growth outperform the local stock market index.
 
 - Australian HNW individuals are heavily exposed to property in their non-traditional investments, and despite a slight rise in interest rates for investors appetite for real estate is forecast to remain strong.
 
 Synopsis
 
 Verdict Financials “Wealth in Australia: Sizing the Market Opportunity” analyzes Australias wealth and retail savings and investments markets, with a focus on the HNW segment. The report is based on our proprietary datasets.
 
 Specifically the report:
 
 - Sizes the affluent market (both by the number of individuals and value of their liquid assets) using our proprietary datasets.
 
 - Analyzes which asset classes are favored by Australias investors and how their preferences impact the growth of the total savings and investments market.
 
 - Examines HNW clients attitudes towards non-liquid investments, such as property and commodities.
 
 - Identifies key drivers and booking centers for offshore investments.
 
 Reasons To Buy
 
 - Benchmark your share of Australias wealth market against the current market size.
 
 - Forecast your future growth prospects using our projections for the market to 2019.
 
 - Identify your most promising client segment by analyzing the penetration of affluent individuals in Australia.
 
 - Evaluate your HNW proposition by understanding how the local tax system affects your HNW clients.
 
 - Review your offshore strategy by learning HNW motivations for offshore investments and their preferred booking centers.

 EXECUTIVE SUMMARY
 Australias wealth market continues to represent a sizable opportunity for wealth managers
 Key findings
 Critical success factors
 SIZING AND FORECASTING THE AUSTRALIAN WEALTH MARKET
 By 2019 affluent individuals will constitute 35% of Australias adult population
 Australias affluent population is forecast to record an AAGR of 9.3% between 2015 and 2019
 HNW individuals account for 1.1% of adults but hold 38.2% of liquid assets
 Affluent individuals hold 90% of Australian retail liquid assets
 Australias onshore wealth is concentrated in the populous states of the eastern seaboard, while growth is to be found in the west and north
 DRIVERS OF GROWTH IN THE AUSTRALIAN WEALTH MARKET
 While still impressive, retail savings and investment market growth dropped in 2015
 Australias investment market is forecast to perform strongly despite weak economic conditions
 Australians love affair with equities is not expected to come to an end any time soon
 Growing at above market rate, retail deposit holdings will remain the largest asset class
 Deposit growth will continue to outstrip GDP growth
 Economic concerns suppressed retail investment holdings growth in 2014, but this is expected to change
 Equities and mutual funds are most allied to the performance of the Australian stock market
 Mutual funds are less sensitive to stock market movements than equities
 There is a negative correlation between the ASX SandP All Ords and retail bond holdings
 Retail bond holdings growth will be sluggish despite efforts to spur the asset class
 HNW INVESTMENT PREFERENCES
 An opportunity for Australian wealth managers, HNW individuals high allocation into superannuation should not be ignored
 HNW investors in Australia hold 14% of their wealth offshore
 Australian HNW investors prefer to invest their wealth at home
 An expectation of better returns is the primary driver for HNW offshore investment
 Tax efficiencies are also an important driver for offshore investments
 HNW offshore wealth is held not in one single location but spread around the globe
 Australia has signed numerous TIEAs in an effort to combat offshore tax evasion
 APPENDIX
 Abbreviations and acronyms
 Supplementary data
 Definitions
 Affluent
 CRS
 Domicile
 DTA
 FATCA
 HNW
 Liquid assets
 Mass affluent
 Onshore
 Residency
 TIEAs
 Methodology
 Global Wealth Model methodology
 Global Retail Investments Analytics methodology
 Verdict Financials 2015 Global Wealth Managers Survey
 Bibliography
 Further reading
 About Verdict Financial
 Disclaimer


List Of Tables

 Table 1: Australian income tax rates for residents 2015-16, applicable as of July 1, 2015
 Table 2: Stamp duty levied in New South Wales, Australia
 Table 3: Australia: adult population segmented by affluent category and asset band (000s), 2010−14
 Table 4: Australia: adult population segmented by affluent category and asset band (000s), 2015e−19f
 Table 5: Australia: total liquid wealth segmented by affluent category and asset band (A$bn), 2010-14
 Table 6: Australia: total liquid wealth segmented by affluent category and asset band (A$bn), 2015e-19f"


List Of Figures

 Figure 1: 26% of the Australian population can be considered affluent
 Figure 2: HNW individuals hold 38.2% of liquid assets in Australia
 Figure 3: Eastern Australia accounts for the majority of affluent liquid assets
 Figure 4: Australias retail investments market is forecast to record a CAGR of 8.7% between 2015 and 2019
 Figure 5: Deposits account for 55.7% of the Australian retail investment market
 Figure 6: Retail deposit holdings will perform strongest over the forecast period
 Figure 7: Deposit holdings growth is forecast to exceed GDP growth
 Figure 8: The performance of the local stock market was weak in recent years
 Figure 9: Retail mutual fund and equity investments correlate strongly to the performance of the Australian stock market
 Figure 10: Mutual funds are heavily invested in property and equity and little else
 Figure 11: Retail bond holdings tend to move in the opposite direction of Australias All Ords Index
 Figure 12: HNW investors allocate 17% of their wealth into non-traditional investments
 Figure 13: HNW individuals in Australia hold 14% of their assets offshore
 Figure 14: Access to better investment options is the biggest motivation for offshore investment
 Figure 15: Australian HNW investors prefer to invest in the US, the UK, and Singapore
 Figure 16: The Australian government has signed 37 TIEAs over the past few years


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Reports Details

Published Date : May 2016
No. of Pages :41
Country :Australia
Category :Finance and Banking
Publisher :Verdict Financial
Report Delivery By :Email
Report Delivery Time :12 to 24 hours after placing the order.

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