Strong long-term growth predicted for financial services: DEXX&R
Mark Kachor
The total financial services market is projected to grow at an average rate of 10.48 per cent per annum through to June 2016, according to the latest DEXX&R Market Projections Report.
The superannuation sector represented the highest growth rate within the retail market, with the report showing a projected average increase of 11.9 per cent per year, or $2,642 billion.
This sector is itself broken down into a number of sub-sectors, including personal superannuation, employer superannuation, public sector funds, retirement saver accounts and eligible rollover funds.
Within these sub-groupings, industry funds and employer superannuation are projected to be the two segments that will experience the strongest growth, with an expected increase of $611 billion and $362 billion respectively by June 2016.
Mark Kachor, managing director of DEXX&R, said: “We’ve made allowance for all the factors as they affect those market sectors.
“Whereas we’ve depressed the funds flowing out…[this] returns to normal in 2009,” he said, describing its expectations of reduced outflows from superannuation up until June 2007, and a gradual return to normalcy around 2009.
The report also provided for superannuation sector growth being tempered by Australia’s ageing population, with the number of individuals aged 65 years and over projected to increase by 38 per cent to 5.1 million over a 10-year period.
According to Kachor, while the report does cover such a broad time horizon, its accuracy has been found to be quite high, particularly over the short-term.
“If we do err, we tend to err on the side of being more conservative,” he said
Last year, DEXX&R tested projections it made in 2002-03 and found that most fell within 5 per cent of actual results.
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