Addressing the Investment Management Consultants Association (IMCA) annual conference yesterday, Oliver Wyman partner Jacob Hook said that these current negative trends looked set to continue in the Australian market over the next several years.
"We see ongoing share market volatility and ongoing risk aversion on behalf of investors, which will probably be a staple for a few years," Mr Hook said.
"So overall you could say the flows outlook is going to be challenging over the next few years."
With market unpredictability likely to continue, Pinnacle Investment Management managing director Ian Macoun said that fund managers should look to more diverse portfolios to win back investor confidence.
"People want less volatility; they don't want to sacrifice expected return so of course the only way that can be delivered is greater diversification and some new types of assets," he said.
The rise in popularity of self-managed super funds continues to be a concern for fund managers that are struggling to deliver returns to investors.
Since 2005 the compound annual growth rate for the self-managed super fund pool has been 13 per cent compared to 3 per cent for all other ex-industry funds.
"It's always good to have a competitive alternative but the size and growth of SMSFs is undeniable. I think we've got to ask ourselves what it is that these people see is SMFs that we're not offering," said Mr Macoun.
