Although the country has well and truly emerged from the global financial crisis (GFC), advisers and investors are still bullish on bank term deposits, according to a new report by Tria Investment Partners.
In its report, entitled ‘Wall of Money’, Tria estimates there has been around $70 billion of post-GFC cash invested in bank term deposits.
Tria partner Andrew Baker said “this is cash that might otherwise have been invested in traditional yield investments such as mortgage trusts, income funds and the like”, adding the so-called ‘wall of money’ phenomenon exists.
“The question is: Will the wall crack and release cash back to the managed investments industry, and if so, when might this occur?” Baker said.
The new means of accessing and managing term deposits, such as their inclusion on major retail wealth platforms, have seen their use by financial planners increase significantly, the report said, noting this presented a new challenge for the managed investments industry.
However, the report also found the flow of new money into term deposits had eased, despite the rollover rate for existing funds being maintained.
