Latest figures from Rice Warner Actuaries indicate the personal investments market has grown substantially over the 12 months to June 2012 and is now bigger than the total volume of superannuation assets held in Australia.
According to the Personal Market Projections Report released yesterday, the personal investments market grew 9.3 per cent over the 12 months to 30 June 2012 to $2.12 trillion, including personal investments held in banks, equities and investment properties.
The figure is greater than the reported total superannuation assets, excluding public sector liabilities and the value of government pensions, listed as $1.4 trillion.
“The personal investments market is growing strongly with savings rates above eight per cent in the past two years,” said Rice Warner principal Richard Weatherhead in commenting on the report findings.
“When personal bank accounts, term deposits and investment properties are taken into account it is larger than the superannuation market, but personal savings funds under management with wealth managers, at $112 billion, are still dwarfed by superannuation,” he said.
“Whilst superannuation will grow quickly in the future due to its significant compulsory component, the personal investment market will become increasingly important as Australians seek flexibility of access to their savings and concessional contribution caps, and other tax changes dampen the attractiveness of investing in superannuation.”
The report projected that the personal investments market will grow at a rate of 4.8 per cent per annum in real terms (8.0 per cent per annum in future dollars) over the next 15 years.
It also projected that wrap platforms, including separately managed accounts and model portfolio products, will grow from 1.6 per cent to 6.6 per cent of market share over the 15 years to 30 June 2027.
Furthermore, directly held assets are set to grow within wrap platforms. The report predicts they will grow to 74 per cent of assets, up from 57 per cent currently, reflecting the “increasing consumer preference for managing investments directly”.
