Wealthy Australians multiplying, report reveals 08:05, Thursday, 22 July 2004
Sydney - Thursday - July 22: (RWE) - The number of high net worth (HNW) individuals in Australia has grown 47 per cent over the past five years - one of the fastest growth rates in the world - according to a new report by independent market analyst Datamonitor entitled Wealth Management in Australia 2004. Australia is now home to almost 200,000 individuals with more than $US300,000 ($A410,000) in onshore liquid assets. Their combined wealth increased by $US54.5 billion ($A74bn) to $US169 billion ($A231 billion) in 2003. Datamonitor says future and historic Australian HNW growth will not stand in stark contrast. Australia's wealthy population is set to grow by a further 54 per cent to almost 308,000 in 2008, and their liquid wealth is forecast to increase at an even faster rate, registering a total rise of 68 per cent over the period. ***** Australia's robust economy has boosted the number of HNW individuals. Despite the global economic slowdown and disinflation, the Australian economy managed to remain relatively unscathed, and per capita gross domestic product (GDP) is comparable to those seen in Western Europe. While domestic sharemarket performance has not been outstanding, it has remained relatively strong in recent years, and this coupled with a low tendency to invest offshore has helped drive growth in Australian onshore wealth. The greatest level of asset growth throughout this period occurred in the $US3 million-plus asset band. Growing at an average annual rate of 11.4 per cent, the value of this liquid asset band amounted to $US47 billion ($A64 billion) in 2003. HNW individuals are set to get richer, with average assets to rise from $US847,000 ($A1.15m) in 2003 to $US922,000 ($A1.26m) in 2008. ***** Datamonitor says Australia's local wealth managers are extremely sophisticated and able to compete and excel at all levels. Domestic competitors - both private banks and mass affluent wealth managers - are focused on building capabilities in a number of key areas such as customer segmentation, relationship management, multi-manager investment and alternative investment offerings, as well as leveraging existing group structures to feed client referrals and product development. "The highly developed platform market in Australia facilitates this proposition and here the local players have a distinct advantage," comments Alan Shields, financial analyst at Datamonitor and author of the report. Australian players recognise the importance of independent advice across the entire savings and investments market and the opportunity for provision of this advice only gets bigger at the high end where high net worth individuals reside. Also, the local wealth managers are fighting to better service the independent advice channel, which they recognise, is crucial for success in the market. "Australia is an extremely difficult place to be for a foreign player looking to enter the wealth market at the mass affluent or HNW level. Any large player without an established footprint would do better to look elsewhere within the Asia-Pacific region for opportunities to grab market share from local competitors," concludes Mr Shields. ***** High net worth individuals are defined as those holding $US300,000 or more of liquid assets. Liquid assets in the report refer to onshore only and are retail. They are taken to include cash, deposits, shares, bonds, mutual funds and other collective investments.
