Super drives financial services growth
New research released by Roy Morgan has confirmed how radically the Australian financial services industry has changed since the last Financial Systems Review (FSR) conducted by Stan Wallis, with particular emphasis on the dominance of superannuation.
The Roy Morgan research, released today, reveals that since the first FSR in 1997, the Australian consumer financial services market has grown at 10 times the rate of the population and that the principal drivers for that growth have been superannuation and lending.
"Superannuation and lending have been the principal drivers of growth, with super now the major financial category, equivalent to just under half the total market value of financial services while lending grew by 324 per cent," the Roy Morgan analysis said.
It said the over-50s were an increasingly dominant force, comprising 39.5 per cent of the population and 55.9 per cent of the financial services market.
As well, the analysis confirmed that the top 20 per cent wealthiest customers dominated the market, controlling 64.8 per cent of its overall value, while the bottom 40 per cent accounted for just 2 per cent.
The research also appeared to emphasise the impact of vertical integration, suggesting the big four banks had increased their market strength, despite the 1997 inquiry predicting that new entrants and shifting market dynamics would result in more competitive conditions.
The Roy Morgan research also appeared to pick up on the continuing reputational issues being encountered by the financial planning industry, with only 25 per cent of Australians rating financial planners favourably in terms of their ‘ethics and honesty'.
AUTHOR
Mike Taylor
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