Financial planners are integral to the success of the Australian financial services industry, according to new research released late last month by the Financial Services Council (FSC) and UBS.
The research, the FSC UBS State of the Industry report, confirmed the financial services industry as the fastest growing segment of the Australian economy and, in doing so, emphasised the integral role played by financial planners.
The report pointed to the central role of financial corporations in facilitating financial flows between sectors. It said the intermediary function of the financial corporations was pivotal, with “the vast majority of investment dollars to industry and government passing through banks, superannuation funds and life companies, rather than directly from households”.
“This in turn emphasises the significance of the role of financial advisers who, in helping their clients achieve their financial goals, help their clients select which superannuation funds, life insurance providers and investment managers is best suited to the client or the client’s circumstances,” the report said.
“In effect, this advice identifies how household funds should be directed at B2B level,” it said.
Elsewhere in the report, the degree to which the Government’s decision to slow the time-table for lifting the superannuation guarantee was also examined, with the research describing lifting the guarantee to 12 per cent as being a critical factor in closing the retirement incomes adequacy gap.
“The delay in phase-in is estimated to deliver a $136 billion shortfall in retirement savings over the same period,” the research analysis said.
The report drove home the degree to which the financial services industry has now clearly surpassed the mining sector as Australia’s fastest growing segment.
According to the report, in the 12 months to 30 September 2015, the financial services industry added $141 billion to the economy or $5,881 for every Australian, with the industry exceeding the value of all mining activities by $532 million.
Commenting on the report, FSC chief executive, Sally Loane said it served to confirm the significant contribution being made by financial services to Australia’s economic and employment growth.
UBS Asset Management Australian head, Bryce Doherty, said the report highlighted a potential opportunity for innovative financial services firms to increase exports of financial services, which are currently only 3.5 per cent of the $2.6 trillion in funds under management.
