4 wealth management stocks to buy now

Wealth management is tipped to be a top growth sector in the next 20 years.

a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

According to a report published on the Investor Daily website, recent research conducted by Deloitte Access Economics found that "the wealth management industry will be worth an extra $250 billion to the Australian economy over the next 20 years, establishing it as a top five growth sector."

Deloitte's research identified Australia's location next to Asia and Asia's aging and increasingly wealthy population as key factors they believe will drive the sector's growth. Backing up the call is data suggesting "three billion people in Asia will have joined the middle class by 2030, and by 2050 the region will account for more than half the world's financial assets."

It's easy to imagine how Australia's advanced and well regulated wealth management industry is in a prime position to capitalise on this situation and export its services into the Asian region. For investors, the problem is identifying which companies are best positioned to benefit.

Given the size of our domestic equity, bond, property and infrastructure markets, it is likely that firms best placed to service Asian clients are those with global capabilities, not just domestic focused equity managers. Likewise, the need to have a presence in Asia arguably makes larger firms with their greater resources better positioned to seize the opportunities.

Here are four companies that fit the bill of already having capabilities to take on global investment mandates, provide foreign financial services and also have the resources to increase their foothold in Asia:

  • AMP (ASX: AMP) has the potential to provide insurance, financial planning and investment management services in Asia. The company already has a presence in the Asian region and recently furthered it through an alliance in China.
  • BT Investment Management (ASX: BTT) is the wealth management arm of Westpac Bank (ASX: WBC). This combination provides significant scope for expansion into Asian markets.
  • Commonwealth Bank (ASX: CBA), like BT, has significant wealth management capabilities thanks to its Colonial First State division. It too is well placed to provide services to the growing demand from Asia.
  • Macquarie Group (ASX: MQG) is of course an Australian success story when it comes to moving into new frontiers beyond Australian shores. With a number of offices already established in Asia, Macquarie will almost certainly be part of the growth in the industry.

Foolish takeaway

While identifying a potential growth theme is a great start, an investor still needs to find a way to profitably invest in the theme. The potential for the Australian wealth management industry to play a leading role in providing services to Asian clients is in itself far from a certainty. Major financial hubs of Europe and America no doubt looking for a slice of the action as well, which makes picking winners no simple task.

Growing companies pay growing dividends. Interested in our #1 dividend-paying stock? Discover The Motley Fool's favourite income idea for 2013-2014 in our brand-new, FREE research report, including a full investment analysis! Simply click here for your FREE copy of "The Motley Fool's Top Dividend Stock for 2013-2014."

More reading

Motley Fool contributor Tim McArthur owns shares in BT Investment Management and Macquarie Group.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »