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Personal investments opportunity to grow

Wealth managers are poised to take greater advantage of the personal investments market off the back of the growth of wrap platforms, says the latest report from Rice Warner.

According to the Personal Market Projections Report released yesterday, wealth managers and advisers has the opportunity to play a larger role in the personal investments market.

“To date the wealth management industry has only tapped around 5 per cent of the personal investments market,” said Rice Warner principal Richard Weatherhead, commenting on the report findings.

“However, reducing platform fees and lower cost investment products providing access to a broader range of investments mean that the industry is set for significant growth,” he said.

The report projected that the personal investments market will grow at a rate 4.8 per cent per annum in real terms over the next 15 years, following the sector’s 9.3 per cent growth in the 12 months to 30 June 2012.

Within this trend, wrap platforms – including managed accounts and model portfolio products – will be the fastest growing segment, the report anticipated, with market share growing from 1.6 per cent to 6.6 per cent over the 15 years to June 2027.

“Within such platforms, directly held assets will grow to become 74.0 per cent of assets, compared to 57 per cent of assets currently,” the report states.

“This reflects the increasing customer preference for managing investments directly, the increased availability and reduced cost of managed discretionary accounts provided through financial advisers and the growth of exchange-traded funds (ETFs),” it continued.