Saturday 15 March 2008

Chinese Wealth

I recently attended a 'careers night' hosted by AMP Financial Services (I'm thinking about applying for their 13-week intensive training to become a financial planner once I've completed the DFS(FP) course. Then again, quitting my salaried position to start my own financial planning business as an AMP franchisee would be a big step, which I haven't decided to take as yet). Anyhow, one of the facts they mentioned about financial planning in Australia is that although Australia is only a tiny fraction of the population of Asia, we represent around 40% of the private retirement savings of Asia. And the Australian retirement savings pool is growing at a rate of around 14%pa (largely due to our compulsory superannuation system) compared to GDP growth of around 4%.

However, this pales into insignificance compared to the rate of growth in wealth management in China. After many years of double-digit GDP growth, and probably more to come in the near-term, the Chinese wealth management industry grew by an amazing 70% in 2007. Although China can be a tough market for western companies to penetrate, there is huge potential for Australian wealth management companies to leverage their existing expertise into this growing market. A JV with an existing Chinese bank or investment company would probably be a good approach, given the risks in investing large amounts of capital to create a local presence from scratch - especially if there is a crash in the Chinese stock market in the next year or two and the grow in wealth management temporarily reverses.

Copyright Enough Wealth 2007

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