Financial & Professional Services Sector in Australia

Financial & Professional Services Sector in Australia

Australia has had one of the best-performing economies in the industrialised world in recent decades and is the world’s 13th largest economy. The financial services sector is the largest contributor to Australia’s national output, generating 11% of real gross value added.

Market overview

Australia is an attractive export destination for the following reasons:

  • Australia has low unemployment

  • The economy is boosted by the vastly growing mining sector

  • Australia has strong links to the rapidly developing Asian markets

  • Australia (comparative to most Western nations) has low government debt

  • Australia has flexibility on interest rates whereas Europe and the US are close to zero.

Australia’s economy is dominated by the services sector. Making up some 78% of GDP.

Australia is also a net importer of services. In 2011, Australia imported some A$9,000m more than it exported.

The financial services sector in Australia is well regulated, has a healthy banking sector and includes the largest pool of investment funds under management in Asia and the 4th largest in the world.

Key opportunities

Investment Funds Asset Pool

The total consolidated assets of managed funds equalled A$1.89tn in June 2012, with more than 70% of this being superannuation fund assets. Opportunities exist for offshore and onshore financial businesses, funds management houses, fund of funds managers, advisors, tax specialists, lawyers and actuaries.

Superannuation

The Australian name given to the government mandated retirement scheme. Employers pay a compulsory minimum of 9% into an employee’s retirement fund (rising to 12% by 2019). Given the compulsory nature of saving for retirements, superannuation funds have grown to more than A$700bn and reached US$1.3trn in 2011 (Austrade).

Investment Banking and Securities Brokerage

Australia’s strong transparent stock market was the 6th largest in the world and the largest in Asia Pacific (ex-Japan) at US$1136bn in July 2011. The Australian foreign exchange has grown by an annual compound rate of 12% between 1998 and 2010. It is ranked 7th largest in the world.

Venture Capital and Private Equity

Australia has well-developed financial service infrastructure for private equity and venture capital. The value of funds committed to resident Venture Capital and Later Stage Private Equity investment vehicles for financial year ending 2011 was $A15.9 billion.

Hedge Funds and Private Banking

Australia’s hedge fund industry was worth US$33.2bn in August 2011, second only to Hong Kong in the Asia-Pacific region. In 2008 Australia’s private wealth market was the 11th largest in the world. Australia also has a growing number of high net worth individuals (9th largest globally) who are major investors in hedge funds and customers of private banking (Austrade).

Retail Banking

As of June 2011, total assets of Australian banks were valued at A$2.7tn. Retail banking is dominated by the four largest domestic banks: The Commonwealth Bank, Westpac Banking Corporation, National Australia Bank and ANZ Banking Group.

Insurance

Between 1999 and 2010, Australia’s finance and insurance sector had an average annual growth rate of 4.7%. Australia’s insurance market is segmented into three sectors: life insurers, health insurers, and general insurers.

Business and consumer services

Important sub sectors in the Australian market include:

  • Conferences and Exhibitions

  • Franchising

  • Management Consulting

  • Marketing Communications

  • Postal and Courier

  • Retail

Latest export opportunities – Financial & Professional Services

Latest export opportunities – Australia

Getting into the market

Australia has one of the most transparent and efficient regulatory environments in the world. There are no foreign exchange controls in Australia and the currency is fully internationalised. Capital flows, profit remittances, capital repatriation, transfer of royalties, and trade related payments remain largely free from regulation.

Companies set up in Australia are subject to the Corporations Act 2001 (Cth), administered by the Australian Securities and Investments Commission (ASIC). Australian corporate income tax is set at 30%. Companies doing business in Australia are typically subject to Goods and Services tax (GST).

In Australia, business meetings are often held in social environments such as cafes and pubs. Australians may speak with a colourful vocabulary, a distinct accent, and phonetics system and make use of slang. Australians are rather informal in business dealings, and the use of a first name is common.

More about doing business in Australia

Contacts

Market intelligence is critical when doing business overseas, and UKTI can provide bespoke market research and support during overseas visits though our chargeable Overseas Market Introduction Service (OMIS).

To commission research or for general advice about the market, get in touch with our specialists in country – or contact your local international trade team.

Contact your local international trade team

Major Events

25th Australasian Finance & Banking Conference

Date: 16 – 18 December 2012

Website address: http://afbc.banking.unsw.edu.au

2012 Financial Services Council Annual Conference

Date: 30 July – 2 August 2013

Website address: www.fscannualconf.org.au

UKTI Events

UKTI runs a range of events for exporters, including seminars in the UK, trade missions to overseas markets and support for attendance at overseas trade shows.

Latest events – Financial & Professional Services

Latest events – Australia

Useful links

More about OMIS and other UKTI services for exporters

Sectors: Financial & Professional Services
Countries: Australia
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