22 Australian Wealth Management Industry Statistics, Trends & Analysis

Australia manages the fourth-largest pension system in the world today. Even though the wealth management industry in the country is only 25 years old, it has become a superannuation system valued at more than $2.1 trillion. When all wealth that is managed comes together within this industry, its overall value reaches $2.8 trillion.

In the next 10 years, the value of the wealth management industry is expected to reach more than $4 trillion.

There are more than 25,000 active financial advisors currently working with this sector. Australia has issued over 2,700 financial services licenses to support the industry. Under superannuation, there are over 583,000 SMSFs and 249 APRA regulated funds which have more than 4 members.

At the same time, the Australian wealth management industry works with 1,500 charitable trusts, managing $4.37 billion in market capitalization.

Interesting Australian Wealth Management Industry Statistics

#1. Financial services in Australia contributed $145.8 billion to the economy at the end of the 2016 economic year, making it the largest contributor to the $1.7 trillion generated by industrial activities. (Financial Services Council)

#2. The Financial services sector provides 416,000 job opportunities in Australia, with half of those jobs belonging to women. 82% of those who are employed by the industry are working full-time. (Financial Services Council)

#3. Trade with the wealth management industry in Australia is small. Just 3.6% of the overall funds that are managed are sourced from other countries. (Financial Services Council)

#4. There are 150 exchanged-traded products which are managed by the Australian wealth management industry. The value of these ETPs at the end of the 2016 economic year was $24.6 billion. (Financial Services Council)

#5. 28 life insurance companies are currently active within the industry, providing $15.5 billion of in-force premiums on $8.1 billion in claims that have been paid. (Financial Services Council)

#6. In 2016, the sector rate of contribution to the economy within the wealth management industry grew by 4.3%. That was 1.5 times faster than the rate of growth for the GDP during the same time. (Financial Services Council)

#7. Through financial services, a contribution of around $6,000 for every person in Australia was generated. The only major industry to offer the same amount of growth within the country was the mining sector in 2016. (Australian Bureau of Statistics)

#8. The four major banks which form the foundation of the Australian wealth management industry are all listed in the top 25 of the world’s safest banks and are some of the most profitable in the world. (The Treasury)

#9. Only $556 million, or 0.8% of service exports, involved insurance of superannuation services. (Australian Bureau of Statistics)

#10. At the end of the 2014 economic cycle, the average superannuation account balance was $110,000. Men had a higher average than women, with average balances being $135,000 and $83,000 respectively. Men in the 65 to 74 age demographic had the accounts of highest value, at $337,200. (APRA)

#11. 46% of the funds that are invested through the industry are managed through wholesale trust. About 14% are managed through unlisted retail trusts, with 13% invested through a pooled superannuation trust. About 37% of regulated super fund assets, or $492 billion, is held in a MySuper product. (APRA)

#12. Funds that are under the advice of a financial advisor increased by 9% at the end of the 2016 economic cycle, reaching a total value of $623 billion. (Financial Services Council)

#13. International equities are the largest asset category, providing 40% of the total ETP funds managed y the industry. Domestic equities account for 39%, which is then followed by fixed-income securities (10%) and domestic property investment (5.5%). (Morningstar)

#14. New South Wales holds the primary share of activities which are managed by the wealth management industry. 46% of the gross value added comes through the state, representing a 15% total of the entire industrial GVA. Victoria held a 27% share in 2016. Queensland grew two percentage points, to 13%. (Financial Services Council)

#15. In absolute terms, the assets held in superannuations have doubled since 2017, going from $722 billion in 2007 to over $1.4 trillion. (PwC)

#16. Public unit trusts have seen their share of the market slip from 22.5% in 2007 to 12.2% in 2017. At the same time, total assets have fallen by over 21%, now totaling $222.4 billion. (PwC)

#17. At the end of the 2016 economic cycle, the superannuations paid investment managers a total of $883.4 million, which represents 44% of the total fee expense. Most of the expenses came from industry superannuation funds, which incurred $2 billion in fees for custodians, administration, investment management, and asset consultation. (PwC)

#18. Up to 40% of the population in Australia will either use or have used a financial planner or advisor. 48% of adults in Australia have unmet financial needs advice. (Productivity Commission)

#19. Since 2009, the number of financial advisors working within the wealth management sector has grown by 41%. (Financial Services Council)

#20. 72% of the AFS licenses which have been issued allow for personal financial advice to be given. (ASIC)

#21. 44% of the financial advisors in Australia operate under a license that was issued to one of the 10 largest financial institutions. These institutions have over 35% of the advisors which are currently offering services in the country. (ASIC)

#22. 78% of the advisory firms that are active within the wealth management industry are small, with fewer than 10 financial advisors providing services. 90% of the firms have 50 or fewer advisors. (ASIC)

Australian Wealth Management Industry Trends and Analysis

Since 1980, the wealth management industry in Australia has doubled its share of the local economy. It has also doubled its share of economic activity within the economy. Part of the reason for this involves the changes to the pension system that were passed in the 1990s. Another component is the fact that incomes have risen in Australia, which have made the services provided by this industry an invaluable part of daily life.

The strength of the industry has allowed Australia to rank as an above-average economy within the G7 group of nations. It has also become one of the top economic indexes in the world today.

By 2035, the superannuation system is expected to reach a value of $9.5 trillion if current growth rates are able to continue. At the end of the 2016 economic cycle, a 9.5% contribution requirement for all employees helps to support the system. Between 2021 and 2025, that contribution is expected to climb to 12%. Although there are some trust issues between the industry and the general public, the Australian wealth management industry will continue to be one of the strongest in the world.