Aberdeen Asset Management managing director in Australia Brett Jollie reckons Australia’s superannuation system is “fantastic” – not only because it benefits the wealth management industry, but also because it’s helping Australians become self-sufficient in retirement.
But while there is a “continuous flow of funds” for managers such as Aberdeen to take advantage of, there are challenges for his business in Australia.
For example, management fees in Australia are relatively inexpensive compared to the rest of the world – something that was also found in a recent Morningstar report.
“We are a very efficient market, despite what we read in the mainstream press and elsewhere. Fees here are quite low – certainly lower than what we see in the USA and the UK,” said Mr Jollie.
There are also challenges from a business perspective, with global fund managers peering into the Australian market and thinking ‘we want some of that’, he added.
The Australian market is also very intermediated, with asset consultants on the institutional side of things and retail research houses on the other, said Mr Jollie.
“The institutional side of the business is similar to the UK, for example, they have asset consultants over there,” he said.
“Then there’s markets where asset consultants don’t really play a part at all – the Netherlands is a classic example. Asia is similar,” said Mr Jollie.
But Australia is unique when it comes to the retail side of funds management. Most other countries do not require retail funds to be rated by a research house, he said.
“Here, if your fund is not recommended by one of the major research houses, you can’t sell it,” said Mr Jollie.
Aberdeen has been working to develop its presence in the retail funds management space in Australia for the last 18 months, said Mr Jollie, with a focus on the six major distribution channels – the big four banks, AMP and IOOF.
“We target the financial advice community and high-net-wealth investors. [We want to] promote what is a strong fixed income capability in the retail channel,” he said.
Part of that promotion has been an education campaign aimed at raising the level of consumer literacy around fixed income, Mr Jollie said.
Aberdeen announced a global re-brand last week to amend the perception around the world that it is an equities specialist, according to Mr Jollie. The company has a new tagline: ‘Simply asset management’.
“In Australia, ironically, if you spoke to institutional investors you’d forgive them for thinking we’re a fixed income house,” he said.
