Morningstar has delivered a glowing assessment of the wealth management industry, with AMP's "dominant, vertically-integrated business model" making it the pick of the bunch.
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.