The focus of capital within industry superannuation and their dictates over how firms grow has been raised as points impacting confidence in public markets, in response to the Stockbrokers and Investments Advisers Association (SIAA).
As properly, the SIAA has informed the Australian Securities and Investments Commission (ASIC) that the exodus of financial advisers has additionally undermined what was as soon as a healthy financial companies ecosystem.
Responding to ASIC’s dialogue paper on the dynamics between public and personal markets, the SIAA pointed that “currently there is a concentration of capital in industry superfunds”.
“They will increasingly dictate how businesses will grow. These funds are also internalising investment making decisions. As large superfunds do not typically invest in small companies, this restricts the avenues available for these companies to list,” the SIAA mentioned.
“These small to mid-size companies are important to the economy, providing most of the employment growth. However, not every company starts out as an ASX 300 company.”
“If this concentration of ownership continues, there is a need to consider how to ensure the next generation of companies has access to capital and an avenue to listing,” the SIAA mentioned.
It mentioned that the institutional investor panorama had considerably modified in Australia as a outcome of the emergence of giant superannuation funds
“Typically, large superannuation funds do not invest in small companies that are seeking capital. This has impacted a whole level of capital raising in the Australian market,” it mentioned.” It is important that the investing setting stays enticing. Our members don’t take into account that the enlargement of investment into personal markets is to the detriment of public listed markets. The enlargement of personal credit and equity is enticing to Australian buyers and is a reflection of investor demand for publicity to totally different asset courses.”
The SIAA mentioned a key situation for its members that impacts on making public and personal markets more enticing and accessible to buyers is the quantity of Financial Advisers in Australia.
“The decline within the quantity of Financial Advisers has been precipitous – falling from 27, 959 in 2019 to fifteen,611 as of 24 April 2025. Financial Advisers are a important half of the distribution community and a healthy financial companies ecosystem, linking buyers with each public and personal market investments.
“The fall in adviser numbers has been primarily caused by a failed approach by government to the education pathway into the profession of Financial Adviser. The government has pledged to address this failure by creating a more flexible pathway for new entrants to the profession that will hopefully significantly increase adviser numbers. We are hopeful that once this reform has been implemented the number of financial advisers will grow substantially. However, this process will take some time as well as legislative change. In the meantime, a lack of adviser numbers will continue to impact investor participation in both public and private markets.”
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