The research house's Equity and Credit Markets Outlook found that Australian wealth managers continue to benefit from strong investment markets and investment flow.
"Favourable demographic trends, such as increasing life expectancy, later retirement ages and population growth, along with an increased focus on building adequate retirement savings, support our thesis," said the report.
"While earnings are volatile given their exposure to investment markets and high operating leverage, long-term industry fundamentals remain attractive," it said.
The risks for wealth managers include the potential for "adverse regulatory outcomes in the areas of superannuation, financial advice and taxation", said the report – as well as the rise of low-cost investment options such as ETFs and 'robo advice'.
"Our preferred wealth management exposures are AMP, which boasts a dominant, vertically-integrated business model, and pure-play asset managers with international asset management expertise, including Magellan Financial Group and Platinum Asset Management," Morningstar said.
APIR Systems hires client development GM
AMP names incoming chief risk officer
Antares Equities hires new director
Warning lights flashing on Aussie equities
What’s in store for the economy in 2018?
Busting common passive investing myths