Long-term growth assured
The financial services industry is expected to grow steadily over the long term, at an average annual growth rate of 10.3 per cent through to December, 2017, according to Dexx&r’s market projections.
Australia’s total superannuation market sector was projected to increase by an average growth rate of 11.3 per cent per annum, almost $3,277 billion.
The outlook in the short term for key investment markets, particularly around equities and property, is going to be affected by the current global economic downturn.
According to Dexx&r, the decline in asset values will be offset by the continued inflow of contributions in the super market segments driven by Superannuation Guarantee contributions.
It is expected that discretionary contributions will decline in the short term but will rebound once equity markets stabilise.
The superannuation market, industry funds and employer super are expected to experience the strongest growth, with the industry fund sector projected to increase by $595 billion and the employer super sector by $267 billion to December 2017.
“Conservative long-term earning rate assumptions have been used in the projections. In the key super and retirement income markets, the projected 10 year earning rates range between 3.5 per cent per annum to 5 per cent per annum.”
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