Getting rich quick

PERSONAL wealth in Australia has grown faster than in any other developed country over the past five years.

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Getting rich quick

PERSONAL wealth grew faster in Australia than in any other developed country in the five years to the end of 2006, according to a Boston Consulting Group report.

Much of that wealth was amassed as a result of Australia's compulsory superannuation system, the report found.

Personal wealth measured in US dollars increased by 19.1 per cent annually in Australia over the period.

That rise was more than double the increase in the global average of 8.6 per cent annually.

The BCG report measures and analyses trends in personal wealth in 62 countries.

Personal wealth is defined as personal assets under management, including listed securities held directly or indirectly through managed investments, cash deposits and money market funds.

It excludes wealth attributed to investors' own businesses, residences or luxury goods.

Australia ranked seventh among all countries, behind only the rapidly developing economies of China on 23.4 per cent, Brazil on 22.4 per cent, Hungary on 22.3 per cent, Poland on 22.1 per cent, Slovakia on 22.0 per cent and the Czech Republic on 19.9 per cent.

Matthew Rogozinski, BCG's head of Australian financial services, said the result reflected a combination of strong financial markets and the superannuation system.

"The superannuation system is having a very large effect on the way personal wealth is accumulated in Australia relative to most other countries," he said.

"The net effect has been to substantially increase Australian investors' allocation towards listed securities at the expense of deposits."

The number of millionaire households in Australia, defined as those with at least $US1 million in assets under management, in Australia grew from 110,000 in 2005 to 135,000 in 2006.

But Mr Rogozinski said the growth in personal wealth in Australia in the past year was driven by mass affluent households, defined as those with between $US0.1 million and $US1.0 million in assets under management.

"Australia's personal wealth profile is certainly maturing quickly and is now much closer than just a few years ago to the pattern of the personal wealth distribution seen in 'old world' economies," he said.

"This represents an opportunity for financial institutions in Australia to develop new models of servicing the premium and private banking customer segments.