According to a Rice Warner report, the Personal Investment Market Projections Report 2014, wrap platforms will grow from 2.6 per cent to 7.6 per cent of the personal investments market by 30 June 2029.
“A significant shift from directly held investments to investments held on platforms is expected,” it stated.
“Personal investments held on platforms will increase to four times its current level in 15 years.”
Having analysed the personal investments market in Australia as at 30 June 2014, the report also projected that by 30 June 2029, total equity holdings, including ETFs, will increase from 14.4 per cent to 21.7 per cent of overall personal investments.
However, total cash and term deposits will fall from 35 per cent to 30 per cent.
Rice Warner indicated that the personal investments market is likely to grow at a rate of 4.6 per cent per annum, in real terms, over the next 15 years.
The personal investments market at 30 June 2014 was valued at $2,490 billion. By comparison, the superannuation market had assets of $1,837 billion at the same date.
Not sure what Rice Warner are thinking here. Unless Wraps open themselves up for direct use then I can’t see them growing this much.
Interesting, but based on what? Trends showing increasing market shares for the big 4 and their preference for Wraps? Or did this come from a survey of consumers asking about their preferences?
I know Wrap platforms come with fees that you don’t get a CommSec account for example, but in a time poor world where the investing is often delegated to an adviser and accountants want consolidated reports, etc, I know at least in my practice that if I didn’t use a Wrap, clients might save the platform fees, but my advice/service fee would be higher for increased admin and that would generally outweigh the saving from not using a Wrap.
IFA, how about a link to the Rice Warner report/research, etc? I place little faith in ‘findings’ without knowing what they are based on. Who? Sample size? etc…