Here is an update on the Australian Wealth Management (AUW) provided by Australian market analyst UBS.

Australian Wealth Management (AUW) Markets impact Q108 FUM, Q2 looking flat

Retail FUM down 9% in the quarter:

Retail FUM (ex CMTs) fell by 9% in Q108, cutting pcp growth to -3%, its slowest in five years. The fall was driven by softer investment markets, with RoI negative for the second consecutive quarter. Net inflows were softer, but still positive, reflecting reduced appetite for property, overseas and fixed income investments, partly offset by higher inflows into cash.

CBA and NAB largest managers:

CBA and NAB remain the largest managers, and have grown broadly in line with system despite relatively soft net inflows (for their size). Most managers have recorded net inflow shares below their FUM shares, with MQG, SGB and BT Wrap badged products the offset, with very large net inflows.

Wholesale FUM down 10% in Q108:

Wholesale FUM was also impacted by weaker markets, falling 10% sequentially and 8% pcp. NAB, AMP and AXA remain the three largest managers, and have recorded FUM increases in the past year on the back of strong inflows.

Small FUM increase likely in Q208:

We expect low single digit retail FUM growth in Q208, after two consecutive quarters of lower balances. Given movements in equity markets in Q208 to date, investment earnings are likely to contribute very slightly to growth, while depleted investor sentiment and mixed investment returns should limit net inflows