The Australian Super Investment Conference held in Cairns this month was told that the huge weight of money chasing assets represents a considerable challenge for the financial services sector.
The executive chair of Industry Fund Services, , used his opening address to the Conference to point to the amount of money entering the market, and said that while this was likely to make some corporate fortunes, it was equally capable of hurting reckless or less experienced players.
He also pointed to the rise of China and India and the impact it would have on the global economy as another major challenge.
“The relentless transfer of traditional jobs to China and India is a massive brake on otherwise inflationary pressures, but will also present huge challenges to our corporate and political leadership,” Weaven said.
He said those challenges related to applying the appropriate policy settings that will nurture Australia’s economic strengths while managing social adjustment.
Weaven said a key factor likely to play on the financial services industry was energy — particularly the demand for oil, and the growing awareness of the implications of global warming.
Looking at past issues that had influenced superannuation fund investments, Weaven said that economic rationality had often defied mass psychology.
He said this had been the case with respect to life companies, direct property, the tech boom, and infrastructure.
