Financial services tops sector survey

Financial services is now Australia's largest industry.


By Darin Tyson-Chan

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The latest study into financial services has shown it is now the largest sector in the Australian economy, prompting calls for the government to accord it similar status and support as other key industries such as mining and agriculture.

The research, compiled by consultancy firm Kreab on behalf of the Financial Services Council (FSC) and UBS Asset Management, revealed the financial services sector contributed $141 billion to the Australian economy, or $5881 per person, during the 12 months to 30 September 2015.

Further, the “State of the Industry 2016” data highlighted financial services contributed $532 million more than the mining sector, $35 billion more than the healthcare and social assistance sector and at least $40 billion more than manufacturing.

Commenting on the findings, FSC chief executive Sally Loane said as Australia transitioned from the mining boom, it was likely that the industry’s economic contribution would rise.

“Financial services has really pulled away from mining to become the biggest sector in our economy and that’s probably only going to increase over time,” Loane said.

“It’s been our fastest growing industry sector over the past 20 years, and that pretty much dovetails in with the start of compulsory superannuation, which started 24 years ago this year.”

She added that growth in the sector over the period, as well as the 39,000 jobs it had created, were significant enough to warrant financial services being considered vitally important to Australia’s livelihood.

“We should look after it and we should value it, as we’ve valued mining and as we’ve valued agriculture – the other major pillars that have basically helped develop Australia’s wealth over decades,” Loane said.

“Financial services’ time has come.”

UBS Asset Management Australia head Bryce Doherty said the position of financial services in the Australian economy would generate even greater opportunities for local groups.

“The large opportunity that’s starting to rear its head is to be a great exporter of our local talent with funds being managed here in Australia,” he said.

“The opportunity around Asia, in line with the Asian Funds Passport, is very large, notwithstanding the need for some tax adjustments and some other regulation adjustments to ensure it’s attractive for offshore investors to come here.

“I’m very optimistic that will happen.”

Doherty identified the ability for fund managers to run overseas asset allocations for clients from their local offices as a further opportunity.

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