Transcript: A video case study on La Trobe Financial
>>Voiceover: Services are a very important part of Australia’s economy. The sector accounts for around 70 per cent of our economic output and provides a job for four out of every five Australians.
Export and investment opportunities for Australia’s services providers are set to grow under the free trade agreements with China, Japan and Korea.
For Australian financial services firms, this means new or improved market access, the ability to provide services on a cross-border basis, and streamlined licensing procedures.
With an office already established in China, La Trobe Financial is looking forward to growing its business in North Asia.
>>Greg O’Neill: I’m Greg O’Neill from La Trobe Financial Services. I’m the president and CEO of La Trobe Financial Services here in marvellous Melbourne.
We commenced our Australian operations in 1952. We deploy 150 staff across three principal offices, here in Melbourne, Sydney and Shanghai.
Asian investors constitute something in the order of 5 per cent of our business by value and that’s now growing and our largest mandate to date from the Asia region is $400 million.
>>Voiceover: China has offered Australia one of its best-ever services commitments in the Free Trade Agreement between the two countries.
Under the agreement, Australian financial services providers in the banking, insurance, funds management and securities sectors will have new or significantly improved access to the dynamic Chinese market.
In anticipation of the China Agreement coming into force, La Trobe Financial has already entered into a Memorandum of Understanding with a large Chinese securities house, to ensure they’re well positioned to capitalise on the new arrangements.
>>Greg O’Neill: For our business alone it’s the sheer size of the market by virtue of population base that we now get access to. As an example, China in its own right has 1.4 billion people and as their middle class expands and rises, as their economy modernises, that middle class has greater disposable income and their wealth management industry grows, which means they’re looking for better services, better investment products and that’s where we fit in.
>>Voiceover: By opening up China’s sizeable financial market, the China Agreement will create jobs in Australia, stimulate growth, and lead to stronger business and cultural ties between our two nations through the exchange of services.
>>Greg O’Neill: The free trade agreement alone with China has been estimated to create something in the order of $710 billion of additional services and value to the Australian economy. That’s why they’re important to us.
For us at La Trobe, we instituted a scholarship program four years ago. We now have 56 alumni embedded back in securities firms and banking firms in Beijing, Shanghai, Chongqing and Hong Kong and these people speak very, very highly of not only of Australia but our operations and their likely prospects for us in the near term to develop further institutional investments with. So our experience is that if you offer a service and you offer to educate, it really provides enormous benefits back to you and back to our country.
>>Voiceover: The Japan Agreement and the Korea Agreement also include provisions that benefit Australian financial services firms.
In Japan and Korea, Australian financial services providers will be able to supply a range of financial services on a cross-border basis, without the need for a full commercial presence.
>>Greg O’Neill: Japan, which has 128 million people, or five times the Australian population, has one of the largest investable wealth industries and second in the world, about $17 trillion of investable wealth. And Korea, with 51 million people, has a very large investment of wealth which they’re now looking to invest outside of their country because they’ve seen the great success that Australia has had in investing out of its own country rather than investing solely within itself.
We definitely would consider opening another office in another part of Asia, perhaps Japan or South Korea, dependent on the investment sum with the counterparty that we’re negotiating with.
At a very simple level the free trade agreements or the magic trifecta, as they’re being referred to – China, Japan and Korea – are very important for the Australian economy, not only now but over the next 50 and indeed perhaps over the next 100 years.
I think the implications are so broad that no individual could say exactly what this will mean in 30 years but it’s definitely an inter-generational benefit. There is enormous upside on agriculture, there is enormous upside on services, education and in wealth management for both countries to learn from one another.
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