Australia Wealth Report 2014

The Australian private banking sector is in its early stages of development compared to the traditional private banking models of Switzerland, the US and the UK. The sector has developed into one of the world’s largest private banking locations, however, forming strong bonds with foreign banks in order to improve the quality of service to clients. Regulation of the Australian private banking sector from the Reserve Bank of Australia (RBA) and the Australian Securities and Investment Commission keep the system and quality of service at high levels. As of January 2014, Basel III implementation has also increased efficiency and transparency in private banking.

Private banking is largely operated by four domestic banks, all of whom have a long standing history in the Australian private banking sector. These banks – Australia and New Zealand Banking Group Ltd, Commonwealth Bank of Australia, National Australia Bank Ltd and Westpac Banking Corporation – have all managed to survive and thrive, even when foreign banks have increasingly come into the country. There is a high level of dominance for some banks over others, due to the economies of scale.

Australian banks will need to assess both their domestic position and their presence on the international scene over the long-term future, in order to form partnerships with private banks overseas and understand different cultures and banking habits. Smaller Australian private banks and wealth managers will need to be innovative and provide a unique service in order to keep control of their client base, due to the many large domestic foreign banks offering services to these individuals.

Australia’s geographical location is also a positive point for the country, as companies can provide a high level of service to clients from not only Australia, but the new emerging wealth located in Asia in countries such as China, India, Malaysia and Indonesia. The future expansion of HNWIs throughout Australia and Asia is also a positive sign for the country’s private banks. One prime example is the Australia and New Zealand Banking Group, who have invested heavily in Asian countries such as Taiwan, China, Hong Kong and Indonesia in order to attract young HNWIs.

This trend is only likely to continue, as Asian countries create more young entrepreneurs that require innovative and reliable ways to bank.

Scope

• An independent market sizing of Australian HNWIs across five wealth bands.

• An analysis of HNWI volume, wealth and allocation trends from 2009 to 2013.

• HNWI volume, wealth and allocation forecasts to 2018.

• HNWI and UHNWI asset allocations assessed across 13 asset classes.

• A geographical breakdown of all foreign assets.

• An alternative breakdown of liquid vs. investable assets.

• The number of UHNWIs in major cities.

• The number of wealth managers in each city.

• City ratings of wealth management saturation and potential.

• Details of how wealth management has developed, in addition to the challenges and opportunities available in the Australian wealth management and private banking sector.

• The size of the Australian wealth management industry.

• The largest private banks measured by assets under management.

• Detailed wealth management and family office information.

• Insights into the drivers of HNWI wealth in Australia.

Key Highlights

How many HNWIs are there in Australia? What is the total wealth that they hold?

What is the allocation of wealth per HNWI in Australia?

By what percentage have Australian HNWI numbers risen in 2013? What is the increase over the total in 2012?

How much of Australian HNWIs’ wealth is held outside their home country? How does this figure compare with the current worldwide average?

What is the largest asset class for Australian HNWIs? What percentage of their total assets does this represent?

What is the total of liquid assets held by Australian HNWIs? What is the percentage of wealth holdings that this figure represents?

Reasons to buy

• Investigate a comprehensive analysis of the private banking and wealth management sector in Australia, and deliver your strategy to clients based on the most current market information.

• Evaluate HNWI volumes in each major city to target prospects precisely and ensure the cost-efficiency of your strategy.

• Assess regulatory developments in the Australian wealth management market to align your operations and minimize your risks in relation to the increasing burden of compliance costs.

• Analyze the asset allocations of HNWIs and ultra-HNWIs, including projections of their volume, wealth and asset allocations to 2018, as well as to identify those segments predicted to grow substantially over the forecast period and develop your product propositions to achieve maximum commercial gain.

Companies mentioned

BT Financial Group (Westpac)

ANZ Private Bank

Bendigo Wealth

Commonwealth Private

Bankwest Private Bank

BOQ Private Bank

Macquarie Private Bank

NAB Private Wealth

St George Bank Private Clients

Suncorp Bank

Table of Contents

1 Introduction

1.1 Details of this Report

1.2 Definitions

2 Executive Summary

3 Wealth Sector Fundamentals

3.1 Political Background

3.2 Economic Background

3.3 Social Background

3.4 Benchmarking Australian Wealth in Context

3.4.1 Distribution of wealth in Australia

3.5 HNWI Volume and Wealth Trends

4 Findings from the WealthInsight HNWI Database

4.1 Trends in HNWI Wealth to 2018

4.1.1 HNWI trend analysis

4.1.2 Wealth band trends

4.1.3 Demographic breakdown of HNWIs

4.1.4 HNWIs – job titles

4.1.5 HNWIs – industry breakdown

4.1.6 HNWIs – industry performance

4.1.7 HNWIs – breakdown by city

4.1.8 HNWIs – city performance

4.1.9 HNWIs – city population densities

4.1.10 HNWIs – city forecasts

4.1.11 HNWIs – breakdown by state

4.1.12 HNWIs – state performance

4.1.13 HNWIs – state population densities

4.2 UHNWIs

4.2.1 UHNWI volume trend analysis

4.2.2 UHNWI wealth trend analysis

4.2.3 Demographic breakdown of UHNWIs

4.2.4 UHNWIs – industry breakdown

4.2.5 UHNWIs – city breakdown and performance

4.3 UHNWIs – Billionaires

4.3.1 Billionaire volume trend analysis

4.3.2 Billionaire wealth trend analysis

4.3.3 Billionaire per capita net worth trend analysis

4.3.4 List of billionaires

4.4 UHNWIs – Centimillionaires

4.4.1 Centimillionaire volume trend analysis

4.4.2 Centimillionaire wealth trend analysis

4.4.3 Centimillionaire per capita net worth trend analysis

4.5 UHNWIs – Affluent Millionaires

4.5.1 Affluent millionaire volume trend analysis

4.5.2 Affluent millionaire wealth trend analysis

4.5.3 Affluent millionaire per capita net worth trend analysis

4.6 Core HNWIs

4.6.1 Core HNWI volume trend analysis

4.7 Core HNWIs – Mid-Tier Millionaires

4.7.1 Mid-tier millionaire volume trend analysis

4.7.2 Mid-tier millionaire wealth trend analysis

4.7.3 Mid-tier millionaire per capita net worth trend analysis

4.8 Core HNWIs – Lower-Tier Millionaires

4.8.1 Lower-tier millionaire volume trend analysis

4.8.2 Lower-tier millionaire wealth trend analysis

4.8.3 Lower-tier millionaire per capita net worth trend analysis

5 Analysis of Australian HNWI Investments

5.1 Analysis by Asset Class

5.1.1 Trends in alternative assets

5.1.2 Trends in ‘art, wine and wheels’

5.1.3 Trends of investments in real estate

5.1.4 Trends of investments in cash and deposits

5.1.5 Trends of investments in fixed-income

5.1.6 Investment trends in equity

5.1.7 Investments trends in business interests

5.2 Analysis of Foreign Investments

5.2.1 Investments in Europe

5.2.2 Investments in North America (including Mexico and the Caribbean)

5.2.3 Investments in the Asia-Pacific

5.2.4 Investments in Central and South America

5.2.5 Investments in the Middle East

5.2.6 Investments in Africa

5.3 Alternative Breakdown: Liquid vs Investable Assets

5.4 Analysis of Australian UHNWI Investments

6 Competitive Landscape of the Wealth Sector

6.1 Competitive Landscape

6.1.1 Domestic private banks

6.1.2 Foreign private banks

6.1.3 Wealth managers

6.1.4 Family offices

6.1.5 Financial advisors

6.2 Developments in the Australian Private Banking Industry

6.3 Wealth Management and the Private Banking Industry

6.4 Australian Wealth Management Industry – Clientele Model and Maturity

6.5 Behavioral Mapping of Wealth Management and Private Banking in Australia

6.6 Porter’s Five Force Analysis – the Wealth Management Industry

7 Appendix

7.1 Additional Components of the Wealth Sector in Australia

7.1.1 Philanthropy

7.1.2 Demand for intergenerational wealth transfer

7.2 Tax Regulations

7.3 Regulations Related to Immigration, Investment and Employment

7.4 Key Drivers

7.4.1 AUS to US$ exchange rate

7.4.2 Real GDP growth

7.4.3 Per capita GDP

7.4.4 Domestic market capitalization

7.4.5 Commodity index

7.4.6 Foreign direct investments – inflow and outflow

7.4.7 Inflation rate

7.4.8 Interest rate

7.4.9 Balance of payments

7.4.10 Government debt

7.4.11 Stock market performance

7.5 Wealth Breakdowns

8 About WealthInsight

List of Tables

Table 1: HNWI Wealth Band and Group Definitions

Table 2: Cities in Australia by Population (Volume), 2013

Table 3: Australian HNWIs – Volume Distribution (%), 2013

Table 4: Australian HNWIs – Wealth Distribution Wealth Pyramid (%), 2013

Table 5: Australian HNWIs – Industry Performance, 2009–2013

Table 6: Australian HNWIs – Cities, 2013

Table 7: Australian HNWI Growth in Top Cities (Thousand), 2009–2013

Table 8: Australian HNWI Population Density in Major Cities (Thousand), 2013

Table 9: Australian HNWIs in Top Cities (Thousand), 2009–2018

Table 10: Australian HNWIs – Growth Rates for Top Cities (%), 2009–2018

Table 11: Australian Volume of HNWI by States (Thousand), 2013

Table 12: Australian HNWI State Performance (%), 2009–2013

Table 13: Australian HNWIs Population Density by State (Thousand), 2013

Table 14: Australian UHNWI Gender Performance (%), 2009–2013

Table 15: Australian UHNWI Source of Wealth (%), 2013

Table 16: Australian Volume of UHNWI in Top Cities (Hundred), 2009–2018

Table 17: Australian UHNWI Growth Rates in Top Cities (%), 2009–2018

Table 18: Australian Billionaires Market Overview (Volume and US$ Billion), 2009–2018

Table 19: Australia’s Top 10 Billionaires (US$ Billions), 2013

Table 20: Australian Billionaire Wealth Growth (US$ Billion), 2009−2013

Table 21: Australian Centimillionaires Market Overview (Volume and US$ Million/Billion), 2009–2018

Table 22: Australian Affluent Millionaires Market Overview (Volume and US$ Million/Billion), 2009–2018

Table 23: Australian Mid-Tier Millionaires Market Overview (Volume and US$ Million/Billion), 2009–2018

Table 24: Australian Lower-Tier Millionaires Market Overview (Volume and US$ Million/Billion), 2009–2018

Table 25: Australian Allocations of HNWI Assets (%), 2009–2018

Table 26: Australian HNWI Holdings Growth (%), 2009–2018

Table 27: Australian HNWI Alternative Asset Composition (%), 2009–2018

Table 28: Australian HNWI Trends of Investments in Alternative Assets (%), 2009–2018

Table 29: Australian Trends in ‘Art, Wine and Wheels’, 2009–2013

Table 30: Global Prime Real Estate Prices per m2 (US$), 2012

Table 31: Australian HNWI Foreign Investment Allocations (%), 2009–2018

Table 32: Australian HNWI Liquidity Breakdown (US$ Billion), 2009–2018

Table 33: Australian HNWI Liquidity Breakdown (%), 2009–2018

Table 34: Australian UHNWI Allocations and Share of HNWI Assets (%), 2013

Table 35: Leading Domestic Private Banks in Australia by Local and Global AuM (US$ Million), 2013

Table 36: Leading Foreign Private Banks in Australia by Local AuM (US$ Million), 2013

Table 37: Leading Wealth Managers in Australia by AuM (US$m), 2013

Table 38: Top Australian Family Offices by AuM (US$m), 2013

Table 39: Wealth Management Industry – Recent Deal Activity in Australia, 2014

Table 40: Australian Income Tax Bands (EUR), 2013–2014

Table 41: AU$ per US$ Exchange Rate, 2009–2018

Table 42: Australian Real GDP Growth (%), 2009–2018

Table 43: Australian GDP per Capita (US$), 2009–2018

Table 44: Australian Domestic Market Capitalization (US$ Billion), 2009–2013

Table 45: Australian Commodity Indices, 2009–2018

Table 46: Australian Foreign Direct Investment (US$ Billion), 2009–2018

Table 47: Australian Inflation Rate (%), 2009–2018

Table 48: Australian Money Market Rate (%), 2009–2018

Table 49: Australian Balance of Payments (US$ Billion), 2009–2013

Table 50: Australian Government Debt as a Percentage of GDP, 2009–2018

Table 51: Australian Stock Market Performance, 2009–2013

Table 52: Australian HNWI Wealth vs GDP Ratio, 2009–2018

Table 53: Australia – Appendix One

Table 54: Australia – Appendix Two

List of Figures

Table 1: HNWI Wealth Band and Group Definitions

Table 2: Cities in Australia by Population (Volume), 2013

Table 3: Australian HNWIs – Volume Distribution (%), 2013

Table 4: Australian HNWIs – Wealth Distribution Wealth Pyramid (%), 2013

Table 5: Australian HNWIs – Industry Performance, 2009–2013

Table 6: Australian HNWIs – Cities, 2013

Table 7: Australian HNWI Growth in Top Cities (Thousand), 2009–2013

Table 8: Australian HNWI Population Density in Major Cities (Thousand), 2013

Table 9: Australian HNWIs in Top Cities (Thousand), 2009–2018

Table 10: Australian HNWIs – Growth Rates for Top Cities (%), 2009–2018

Table 11: Australian Volume of HNWI by States (Thousand), 2013

Table 12: Australian HNWI State Performance (%), 2009–2013

Table 13: Australian HNWIs Population Density by State (Thousand), 2013

Table 14: Australian UHNWI Gender Performance (%), 2009–2013

Table 15: Australian UHNWI Source of Wealth (%), 2013

Table 16: Australian Volume of UHNWI in Top Cities (Hundred), 2009–2018

Table 17: Australian UHNWI Growth Rates in Top Cities (%), 2009–2018

Table 18: Australian Billionaires Market Overview (Volume and US$ Billion), 2009–2018

Table 19: Australia’s Top 10 Billionaires (US$ Billions), 2013

Table 20: Australian Billionaire Wealth Growth (US$ Billion), 2009−2013

Table 21: Australian Centimillionaires Market Overview (Volume and US$ Million/Billion), 2009–2018

Table 22: Australian Affluent Millionaires Market Overview (Volume and US$ Million/Billion), 2009–2018

Table 23: Australian Mid-Tier Millionaires Market Overview (Volume and US$ Million/Billion), 2009–2018

Table 24: Australian Lower-Tier Millionaires Market Overview (Volume and US$ Million/Billion), 2009–2018

Table 25: Australian Allocations of HNWI Assets (%), 2009–2018

Table 26: Australian HNWI Holdings Growth (%), 2009–2018

Table 27: Australian HNWI Alternative Asset Composition (%), 2009–2018

Table 28: Australian HNWI Trends of Investments in Alternative Assets (%), 2009–2018

Table 29: Australian Trends in ‘Art, Wine and Wheels’, 2009–2013

Table 30: Global Prime Real Estate Prices per m2 (US$), 2012

Table 31: Australian HNWI Foreign Investment Allocations (%), 2009–2018

Table 32: Australian HNWI Liquidity Breakdown (US$ Billion), 2009–2018

Table 33: Australian HNWI Liquidity Breakdown (%), 2009–2018

Table 34: Australian UHNWI Allocations and Share of HNWI Assets (%), 2013

Table 35: Leading Domestic Private Banks in Australia by Local and Global AuM (US$ Million), 2013

Table 36: Leading Foreign Private Banks in Australia by Local AuM (US$ Million), 2013

Table 37: Leading Wealth Managers in Australia by AuM (US$m), 2013

Table 38: Top Australian Family Offices by AuM (US$m), 2013

Table 39: Wealth Management Industry – Recent Deal Activity in Australia, 2014

Table 40: Australian Income Tax Bands (EUR), 2013–2014

Table 41: AU$ per US$ Exchange Rate, 2009–2018

Table 42: Australian Real GDP Growth (%), 2009–2018

Table 43: Australian GDP per Capita (US$), 2009–2018

Table 44: Australian Domestic Market Capitalization (US$ Billion), 2009–2013

Table 45: Australian Commodity Indices, 2009–2018

Table 46: Australian Foreign Direct Investment (US$ Billion), 2009–2018

Table 47: Australian Inflation Rate (%), 2009–2018

Table 48: Australian Money Market Rate (%), 2009–2018

Table 49: Australian Balance of Payments (US$ Billion), 2009–2013

Table 50: Australian Government Debt as a Percentage of GDP, 2009–2018

Table 51: Australian Stock Market Performance, 2009–2013

Table 52: Australian HNWI Wealth vs GDP Ratio, 2009–2018

Table 53: Australia – Appendix One

Table 54: Australia – Appendix Two

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