Feeling the pinch: Competition from SMSFs has put pressure on the industry's average fee

Strong equity markets and growth in contributions have boosted revenue for the Superannuation Funds Management Services industry over the past five years. This has ensured a steady flow of retirement savings into the market, to the benefit of industry investment managers. Industry revenue is generated through management fees that operators levy on their funds under management (FUM). The value of FUM fluctuates according to the flow of funds and the performance of investment markets. Industry revenue is expected to increase at an annualised 8.6% over the five years through 2017-18, to reach $10.4 billion. This includes growth of 1.6% in the current year...read more.

Industry Statistics & Market Size
Revenue
$10bn
Annual Growth 13-18
8.6%
Forecast Growth 18-23
Profit
Employment
16,931
Businesses
3,649
Market Share of Companies

Industry Threats & Opportunities

  • Revenue has increased due to strong growth in equity markets and contributions
  • The industry’s structure has changed over the past five years due to regulation changes
  • Industry profitability is likely to grow as fund managers increase the scale of their operations
  • Industry Report - Starting a New Business Chapter

    The industry exhibits medium barriers to entry, with the level increasing. Newly established fund managers must attract competent staff, develop relevant products and platforms, establish a distribution network, create a competitive investment record, build a reputation and ultimately attract funds. In establishing operations, entrants must do so while competing against well-established players that benefit from sizeable economies of scale and vertical integration. New fund managers will find it difficult to compete on fees while they are growing their FUM from a low base. Investors with a large amount of funds to invest, such as financial institutions, do not normally find it feasible to place assets in investment funds below a certain size...purchase to read more.

    Additional Insights for the Superannuation Funds Management Services Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Superannuation Funds Management Services Industry are

  • Successful investment record
  • Having an extensive distribution network
  • Market research and understanding
  • IBISWorld analysts also discuss how external factors such as Demand from superannuation funds and All Ordinaries index in the Superannuation Funds Management Services industry impact industry performance..

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    What's in this report

    What is the Superannuation Funds Management Services Industry?

    Industry participants provide investment management, administration and advisory services to superannuation funds. Service fees are earned as a percentage of the funds under management, administration or advice. Investment managers also receive commissions based on performance, with a portion determined by absolute returns and the rest by industry benchmarks. Therefore, investment managers can earn some performance commissions despite delivering losses.

    Industry Products
  • Cash and deposits
  • Domestic debt securities
  • Australian equities and trusts
  • Property
  • Overseas assets
  • Other assets
  • Industry Activities
  • Portfolio management services on a commission or fee basis
  • Financial asset investment consultant services
  • Administration services
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Demand from superannuation funds
  • All Ordinaries index
  • MSCI World Index
  • Cash rate

  • Current Performance
  • Market conditions
  • Recovering markets
  • Stronger Super reforms
  • External threats
  • Chart: Revenue Growth

  • Industry Outlook
  • Slowing contributions
  • Superannuation guarantee increased
  • Increased competition
  • Table: Superannuation Funds Management Services Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Superannuation Funds Management Services Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Superannuation Funds
  • Consumers

  • Key Selling Industries
  • Custody, Trustee and Stock Exchange Services
  • Financial Planning and Investment Advice
  • Superannuation Funds

  • Products & Services
  • Australian equities and trusts
  • Overseas assets
  • Domestic debt securities
  • Cash and deposits
  • Property
  • Other assets
  • Chart: Superannuation Funds Management Services Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Industry funds
  • Self-managed super funds
  • Retail funds
  • Public sector funds
  • Corporate funds
  • Life office statutory funds
  • Small funds
  • Chart: Major Market Segmentation for the Superannuation Funds Management Services Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Chart: Cost Structure Benchmarking – Sector vs Superannuation Funds Management Services

  • Basis of Competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Superannuation Funds Management Services Industry

  • Industry Globalization
    AMP Limited, Commonwealth Bank of Australia,
  • Table: AMP Limited - financial performance
  • Table: Commonwealth Bank of Australia - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Superannuation Funds Management Services Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Superannuation Funds Management Services Industry
    Includes:
  • Industry Revenue (2009-2023)
  • Industry Gross Product (2009-2023)
  • Establishments (2009-2023)
  • Businesses (2009-2023)
  • Employment (2009-2023)
  • Wages (2009-2023)
  • Total Assets (2009-2023)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Funds Under Management (Fum)
  • The value of client assets under investment management.
  • Management Expense Ratio
  • The expenses incurred by account holders as a percentage of FUM.
  • Self-Managed Superannuation Funds
  • ATO-regulated superannuation entities that have less than five members, all of whom are trustees or directors of the corporate trustee.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Superannuation Funds Management Services market research report offers insightful industry analysis and research into the market at the national level. IBISWorld’s in-depth industry market research is presented in a logical and consistent format. The industry report contains key industry statistics, market size, industry trends, and growth and profit forecasts for a 5-year outlook period.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Superannuation Funds Management Services:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Superannuation Funds Management Services market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Superannuation Funds Management Services, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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