COVID-19 has not slowed the growth of the Australian wealth industry, with the number of products registered over the last 12-18 months being significantly higher than the 10-year annual average, according to a data company.
Chris Donohoe is chief executive of APIR, which provides the codes that are standard identifiers for collective investment schemes such as managed funds and superannuation funds.
Speaking at the recent FSC (Financial Services Council) Investment Summit, Mr Donohoe said APIR had observed the second consecutive year of participant or product issuer growth, but not from expected sources.
“Interestingly, much of the growth in product registrations has come from more vanilla funds such as traditional equity funds and property trusts, which is great for the industry,” he said.
“We did observe some rationalisation in the investment options segment of the superannuation industry but nothing out of the ordinary. It shows that the domestic wealth sector is resilient and has largely been able to withstand the shock of the pandemic.”
Mr Donohoe added the growth also demonstrates the ability for financial services organisations to adapt despite the challenging market conditions.
“The fact that financial services providers continue to innovate and engineer products that attract investor demand is encouraging,” he said.
APIR has engaged with industry stakeholders such as the FSC on extending its data collection capabilities to act as a source of truth for target market determinations (TMD), a requirement for financial products under the new design and distribution obligations (DDO).
The new DDO regulation from ASIC will place the onus on product issuers and platform providers to ensure products are suitable for the market they are being distributed to.
APIR has proposed that as it already interacts with fund providers, it has the existing infrastructure to accommodate the roll out and ongoing management for such a service.
“We already collect and maintain data for these providers and a TMD repository would be an extension of our utility function and a centralised source for distributors to easily access TMD from the one place and negate them having to obtain TMDs from multiple product issuers,” Mr Donohoe said.
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].