Tria Managing Partner Andrew Baker urged sector players to remain positive about future opportunities, despite the industry experiencing tough market conditions – “perhaps the toughest we have seen in the past 20 years.”

“We are seeing severe cyclical and structural forces at play for the Australian wealth management industry, where for the past three or so years it has been difficult to remain positive unless you are selling cash deposits or index funds,” Baker said.

“Other forces, including industry regulation, new technology and rotation away from collective super to Self-Managed Super Funds (SMSFs), and from managed funds to direct assets, remain some of the challenges and opportunities we see ahead.

“Relatively straightforward improvements to client segmentation and communication can result in a more client-centric firm, while improvements to development and rationalisation processes can greatly improve efficiency,” he said.  Mr Baker was speaking at the Tria Investment Partners’ “Spring into Strategy” presentation attended in Sydney by a large contingent of the Australian wealth management sector.

Tria co-presenter Oliver Hesketh detailed the allure of the rapidly growing SMSF sector, noting that the segment remains large, and largely untapped for the bulk of the wealth management industry.

“The challenge for fund managers here is to regain relevancy and to deliver offers that meet the needs and desired access points for SMSFs, while also stacking up against the simplicity and flexibility they require,” Mr Hesketh said. Among a number of fresh ideas presented to attendees, Mr Hesketh indicated the primary trends to watch include:

• The continued rise of ETFs
• The increasing capabilities of adviser desktops
• The expected arrival of the ASX AQUA II platform in 2012. 

However, Tria remains fundamentally positive about the outlook for the sector, which Mr Baker said is likely to grow to a $3 trillion pool by the year 2020.

“As a consequence the good news about this mandated growth is that it brings a hunger for new approaches to product. The prospects for innovation have improved markedly during this current phase, and so we believe there is very little downside for wealth management organisations to take a long-term strategic view of their product mix, their position in the investor value chain and to focus on the market segments that will really deliver for them well into the future,” Mr Baker said.

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