Australia a good testing ground for new products

The executive director at a leading international financial services group believes the Australian investment market presents a good environment for fund managers to develop new products.

Principal Global Investors head of equities Tim Dunbar said: “We see Australia as being a market on the investment side that’s at the leading edge. A lot of products get talked about worldwide and globally, but I think they really get tested out here in Australia and further developed.

“We find that quite interesting and it’s important I think in our world to be a part of that,” he added.

Dunbar feels the appetite for new investment products is being driven by the superannuation regime in this country and the encouragement the system is giving investors to take an interest in making the best use out of their funds.

“Superannuation makes everybody interested in investments. When you’ve built up a substantial level you really start to become more and more interested in opportunities. Even the average person on the street probably knows a bit more about investments here than is normal,” he said.

Dunbar has observed that the success of the Australian super regime has led to other countries around the world travelling down a similar path.

“There actually have been a lot of other countries who have started similar plans. Mexico has a very similar mandatory pension scheme, Chile has it, Argentina has it, I think Poland has it, Hong Kong has it, and China would like to do something like that,” he said.

While the rest of the world viewed the system very positively, Dunbar thinks political and cultural issues will probably prevent some areas from introducing a comparable arrangement. He cited the European situation as a good example of this.

“Europe tends to have the perspective that the government is supposed to take care of me when I retire and I’m entitled to this sort of a payout with blinders on in terms of how does that get paid when they’re actually in retirement,” he explained.