Investing Classes Australia

Australia continuously ranks within the top 15 global economies, with a GDP of around AUD 2.7 trillion. While many industries contribute to the country's economy, the financial sector contributes around 8-9%, making it the largest sector in terms of contribution. The finance industry employs over 450,000 people nationwide, with major hubs in Sydney, Melbourne, and Perth. A part of this industry is investing through the Australian Securities Exchange (ASX), which ranks among the top 20 exchanges globally. Australia places a large focus on its superannuation (pension) system, as it is the fourth largest in the world. As the financial industry grows, investing has become a major part of the sector, allowing individuals and institutions to prosper.

Major Aspects of the Finance Industry for Investing in Australia

Every financial sector has several moving parts that allow professionals to handle every aspect of money. However, almost every aspect of the financial sector can benefit from investing professionals, even if it may not seem obvious on the surface.

Banking and Financial Services

Banks make up the majority of the face of the financial sector. Four major banks dominate throughout Australia:

• Commonwealth Bank of Australia
• Westpac Banking Corporation
• Australia and New Zealand Banking Group
• National Australia Bank

While these institutions primarily handle simple, everyday money exchanges, they also have teams that work on loans and other investment services. Individuals can partake in term deposits (low-risk investments), managed funds, or investment loans. Banks can also act as institutional investors and invest in the market.

Superannuation (Pension)

Australia's compulsory superannuation system requires companies to contribute a portion of employee earnings to a retirement fund for each employee. At the end of 2024, this system's total assets were valued at over AUD 3.5 trillion. Investment managers regulate and manage these funds. Major superannuation funds include:

• AustralianSuper
• UniSuper
• Hostplus
• Aware Super

This system acts as a required investment for all working people throughout Australia. Some individuals prefer to take control of this system and diversify their investment portfolio into multiple avenues.

Wealth Management and Investment

When individuals or institutions acquire wealth, they need professionals to manage it. Investment professionals handle portfolio management, financial advisory, retirement planning, and real estate and infrastructure investments. A large part of this area is helping to ensure a client’s money continues to make money. Many investment firms throughout Australia need investing professionals, including:

• Macquarie Group
• IFM Investors
• Magellan Financial Group
• Platinum Asset Management

Financial advisors spend time understanding their clients and the stock market to help them make informed decisions with their money. They work directly with clients to meet their financial goals.

Insurance and Financial Protection

While most think of basic insurance, like car, home, and life, when they think of this financial subsection, insurance and investing are closely linked. When making insurance policies, those with investment training can create investment-linked policies, like life policies, where a portion goes to life cover while the rest gets invested into a chosen portfolio. Insurance policies can protect superannuation funds. Risk managers can blend policies into investment strategies for a holistic wealth plan. Major insurance companies benefiting from investment professionals include:

• Allianz Australia
• Suncorp Group
• QBE Insurance
• Medibank Private.

Investing Roles and Salaries in Australia

• Financial Analysts interpret business and economic data to drive financial decisions. They create financial models and forecasts. They can help clients make smart investments. While investing is important in this role, these professionals should also understand data analytics. The average salary for this role throughout Australia is around AUD 100,000 annually.
• Investment Bankers work with companies or individuals to raise capital and manage financial transactions. They closely work with stocks and bonds while advising clients on various acquisitions. On average, they earn around AUD 110,000 annually.
• Risk Managers help identify and mitigate financial risks. They will analyze potential losses due to various risk factors and implement risk policies to protect their clients. On average, Risk Managers earn around AUD 120,000 annually.
• Accountants work with financial documents to ensure accurate bookkeeping. They often work within companies to maintain records and meet standards. Companies and individuals can use Accountants to monitor and track various investments. They earn around AUD 95,000 annually.
• Investment Analysts are similar to Financial Analysts in that they evaluate financial data; however, Investment Analysts focus on making investment decisions. They will need knowledge of data analytics and the ASX. Investment analysts earn around AUD 95,000 annually but can earn more depending on their clients.
• Superannuation Fund Managers handle clients' investment portfolios. They work within the superannuation system to help grow these portfolios. They allocate assets across various investments, including bonds, stocks, properties, and alternatives. On average, these fund managers earn around AUD 130,000 annually.

Investing Becoming Commonplace for Australians

Since the introduction of superannuation in Australia in 1992, investing has become a part of every Australian's life. As the financial industry grows and the superannuation system manages trillions in assets, investing has become a major player in Australia's economy. The market is seeing more individuals take advantage of and control their investments. As young Australians continue to enter the market, the country is seeing a rise in financial literacy and an opportunity to help facilitate and improve education beyond quick online guides on platforms like TikTok and Reddit, and introduce new regulations to help protect against misinformed investing.

The finance sector expects to see the average of 2.5% employment growth continue, with many of those jobs revolving around investing. Some companies have started seeking candidates with financial/investing knowledge and tech/analytics skills, as both industries have become dominant in Australia's economy. Investment firms have introduced digital wealth management tools and automated trading platforms, like eToro, MetaTrader4, and cTrader, which require professionals to have knowledge of investing and the financial market and know some programming languages, like Python, to create machine learning models to help facilitate trading. As the economy continues to grow, investing will play an important part in every Australian's life, so becoming proficient in investing strategies can help anyone succeed in the Australian market.