Financial services the new bastion for wealth
Financial services rather than mining is likely to be where most of Australia's rich will earn their wealth over the next five years.
Oliver Williams, an analyst with WealthInsight, said financial services was becoming the new bastion for Australia's wealthy.
"Although Australia's established multimillionaires, such as Gina Rinehart and Clive Palmer, still have large stakes in the mining sector, most of the country's emerging millionaires are profiting from financial services," he said.
WealthInsight estimates that by 2017 there will be 402,000 millionaires in Australia, a 33 per cent increase on 2012. The majority of these 100,000 new millionaires will earn their wealth from financial services.
At the end of 2012 there were 302,000 millionaires in Australia, defined as those with net wealth of at least $US1 million, excluding their primary residences. They collectively hold $US900 billion, or 15.5 per cent of the total individual wealth in Australia. The number of multimillionaires, defined as those with more than $US30 million, was estimated at 2740 in 2012.
According to a WealthInsight report, 18.4 per cent of millionaires acquired their wealth from financial services. The next largest sector, basic materials, which includes agriculture, mining and metals, was the source of wealth for 14.3 per cent of millionaires.
Australia has one of the healthiest distributions of wealth and the world's second-largest wealth per capita. Wealth per capita in Australia amounted close to $US344,000, the second highest in the world after Switzerland, which was $US498,000 in 2012.
Collectively, Australian millionaires hold 15.5 per cent of the country's wealth, which is far below the global average of 29 per cent.
"Although we see billionaires earning stratospheric amounts, the reality is they are a tiny minority in what is a very equal economy," Mr Williams said.
Wealth creation in financial services was likely to be fast and highly competitive.
"The sector already accounts for 10 per cent of Australia's national output and the nation has one of the world's largest groups of investment funds," he said.
Sydney has turned itself into Australia's financial centre and has therefore attracted more millionaires than any other city in Australia with about 81,400," he said. "But cities with undeveloped financial hubs are likely to fall way behind."