Outlook rosy for managed funds
Australia’s managed funds market can look forward to another 10 to 15 years of strong growth, according to a report released by Axiss Australia.
The group set up by the Federal Government to promote Australia as the hub of financial services in the Asian region projects average growth rates of between 10 and 20 per cent for the managed funds industry over the next 10 to 15 years. And if the growth remains at the lower end of the spectrum at 10 per cent, total funds under management in Australia should reach $2.3 trillion by 2015, according to the report.
Axiss chief executive Les Hosking says the positive findings are not simply based on optimism about growth in the industry. Rather, the growth forecast in the report is largely based on an increased superannuation contribution, which has risen from 8 to 9 per cent.
Total funds under management in Australia at the end of the last financial year exceeded $590 billion. This is about $140 billion more than the total funds at the end of the financial year before that, according to Hosking.
Complementing the growth in revenues will be an increase in customers and profits anticipated by fund managers, Axiss says in its report. This means that employment growth in the industry should continue to boom.
Hosking also attributes the strong position of the Australian market to the interest that global funds management firms have shown in it recently. Attracting the international attention are what Hosking describes as Australia's innovative retirement income policy, strong regulatory environment and mature investment markets.
"The global operators are not only servicing the Australian funds, but are seeing the maturity of the Australian funds as a base for the Asian market," he says.
"There are a number of Asian schemes changing and adapting Australian formulas, such as the pension schemes in Hong Kong and Singapore."
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