Asian demand for Australia’s wealth management, distribution and financial planning expertise is set to “ignite”, according to a new report that lists wealth management as one of five growth industries worth an extra $250 billion to the national economy over the next 20 years.
The paper, Positioning for Prosperity? Catching the next wave, is the third report in Deloitte’s Building the Lucky Country series.
According to Neil Brown, Deloitte wealth management leader, Australia’s wealth industry has honed skills, particularly in superannuation and funds management, and built technologies such as wrap and distribution platforms, which appealed to investors. That, coupled with its strong regulatory framework, gives Australia a shot at being a global competitor.
“The combination of the world getting older and Asia’s wealth growing offers Australia the perfect opportunity to trade on the probity of its wealth management sector. The reputation and robustness of our regulatory system, together with our domestic success in building the fourth largest superannuation asset pool in the world are attractive propositions to the growing Asian middle class,” he said.
Australia’s proximity to Asia and its cultural ties across business, education and politics also gave it a competitive advantage in the exporting of skills and services, Brown said.
However, Deloitte partners Ric Simes and Ian Harper said the wealth management industry ran the risk of missing out on valuable opportunities just as Australia’s tourism industry had failed to fully maximise on opportunities to draw Asian visitors in the last decade.
“This report is not a forecast of the areas that will grow the fastest, but rather where the opportunities lie,” Harper said. “The evolution of the global economy has created opportunities which play to our strengths.”
Harper said the five industries singled out by Deloitte – agribusiness, gas, tourism, international education and wealth – were “particularly favoured”, although opportunities also existed in areas such as healthcare, aged care, banking, business and property services, transport and logistics, and manufacturing.
“Wealth management makes it on the list because of the location of China and the rest of Asia right on our doorstep, plus the fact that Asia’s ageing population is also getting wealthier and people will be seeking a wider range of services,” he said.
“We’re seeking to deal with issues around longevity risk and sequencing risk, which is also an area of increasing focus for our foreign neighbours.”
The full version of Positioning for Prosperity? will be released in early 2014.
