Revisit the trends that have evolved this year and how they are likely to impact AFSLs, super funds, investment managers and platform providers in 2024 and beyond.
You can also re-visit Rainmaker Information's webinar wrapping up the wealth management landscape in 2023.
Financial advice
The number of ASIC-registered financial advisers decreased 3.1% through the 12 months to end September 2023 to reach 16,013.
The number of registered financial advisers may be stabilising around the 16,000 mark, buoyed by the recent release of the government’s response to the Quality of Advice Review.
Australia remains on-track for a massive shortfall in the number of advisers available to service the projected 17% increase in the number of pre and post retirees (people aged 55 to 84 years) over the next decade
The total number of advice licensees rose 1.1% during the September quarter, but through the 12-month period it grew 1.9%. This results in there now being 1,856 AFSLs operating in Australia.
FirstChoice, BT Panorama and Macquarie Wrap are the most widely used platform among Australia’s verified financial advisers. These Big-3 are used by almost one-third of all advisers.
The Australian-sourced (unconsolidated) investment management FUM market reached $3.2 trillion after growing 8.3% in the 12 months to end June 2023.
The indexed investments segment grew 14.4%, twice the growth of actively managed investment segment which grew just 6.6%.
Ethical FUM surpassed $400 billion mark after growing 6.4% in 12 month to June 2023.
The five fastest growing asset classes were: Other (up 16.2%), direct property (up 16.0%), international equities (12.3%), infrastructure (up 12.1%) and Australian property (up 11.6%).
For the 22-23 financial year, 76% of active Australian equities managed funds and 76% of active international equities managed funds underperformed the capital markets indexes.
Australia’s unconsolidated wholesale funds market at the end of the 2023 financial was $1.8 trillion in funds under administration (FUA). Adding in Term Deposits (TD) increases this amount to $2.9 trillion.
Platform FUA in master trusts, wraps and selected managed accounts increased 16% or by $132 billion over the financial year.
Investment wraps was the fastest growing segment with a remarkable growth of 29.4% during the 12-month period, followed by retirement super that increased 19.4%.
Insignia is again the platform marker leader with $159 billion FUA for a 17.4% market share, followed by Colonial First State with 16.5%, BT with 13.2%, Macquarie with 12.7%, and AMP with 12.3%.
The share of managed accounts held in SMAs has surged to 59%,squeezing MDAs down to just 31%.
Default workplace super funds in 2022-23 achieved average returns of 9.3%, a significant reversal from the –3.8% return in 2021-22. This was three percentage points above the inflation rate.
Over the 12-month period to June 2023, international equities was the highest returning asset class with a median return of 16%.
Lifecycle MySuper strategy noticeably outperformed MySuper single strategy.
Australia’s population is projected to increase 28% through the next two decades, rising from 26.5 million in 2023 to 33.9 million in 2043. But even though the percent who are retired is projected to increase from 17% to only 21%, the way the age structure of the population projections plays out means the number of retirees will surge 54% from 4.6 million to 7.0 million, equating to 2.5 million more retirees over the next 20 years.
17% of all APRA regulated superannuation FUM is internally managed, but for NFP super funds this proportion jumps to 23%.
