How Australia compares with 9 other countries at turning savers into investors
Australia delivers an effective investment ecosystem despite comparatively weaker disclosure and portfolio-transparency standards.
This article originally appeared on our US website. It has been amended for an Australian audience.
Why do some developed countries successfully promote strong investment cultures while others struggle? And how does Australia measure up?
We answer those questions and more in our Investor Journeys Around the World report, which found that building a robust investment market is easier than building a nation of investors.
Some of the 10 developed countries we studied offer solid tax incentives, investor-friendly regulations, and broad product choice, yet many households continue to hold substantial amounts of cash instead of investing in capital markets. Why? Because incentives alone aren’t enough. Our research suggests they have to be paired with access and an investing experience that earns people’s trust.
Evaluating the investor culture in Australia
We graded each country overall and rated them on market structure and investor environment. Australia earns an overall B grade in our report.
Figure 2: Household Financial Assets by Type (Australia). Source: OECD. This data does not include residential property investments.
The success of auto-enrolment sees retirement assets dominate household assets, and the picture has remained largely unchanged for many years. Unlike most markets, open-end funds are not the predominant retail investment vehicle, though ETFs are increasingly popular.
Here’s what Australia does well in terms of market structure.
- Australia has a strong regulatory framework, although its relatively lighter fund disclosure requirements contrast with a stringent compliance and low-threshold breach-reporting regime which in practice can subject those that try to bring transparency, by collating hard to get data, to disproportionately high standards.
- The market relies less on broad-based investment tax incentives than some peers, but the compulsory superannuation system is one of the strongest retirement savings frameworks in the study - often held out as a model for DC, with its longstanding auto-enrolment and ‘pot stays with member’ features having contributed to a high proportion of employees accumulating pension savings.
- The FOFA reforms reduced conflicts of interest by banning many commission structures and creating a comparatively robust advice framework.
- Product governance is generally strong, although requirements around board independence and formal value assessments are less extensive than in some leading international markets.
In terms of investor environment, Australia stands out for the transparency of performance-fee reporting but is a notable outlier with funds generally not required to disclose full portfolio holdings. Australia is the only market in the study that does not require past performance information within its primary short-form disclosure document and uses a distinctive risk-labelling approach based on the projected frequency of negative returns over a 20-year horizon.
Overall, Australia combines one of the world’s strongest retirement savings systems with a healthy advice framework and solid fee disclosures, delivering an effective investment ecosystem despite comparatively weaker disclosure and portfolio-transparency standards.
Why countries are trying to turn savers into investors
Across developed markets, governments are encouraging citizens to move beyond saving and become long-term investors. They’re motivated by aging populations, growing demands on public finances, concerns about retirement adequacy, and the need to mobilize capital for economic growth.
Exhibit 1: Household Financial Assets by Type
One caveat to this data is that it does not include real assets such as residential property. Some markets have given favourable tax treatment to investment properties, making this a more attractive investment than traditional markets. For example, Australia has recently adjusted their taxation of property, but the historical approach has led to a significant subset of the population to holding property as an investment asset.
Our report looks at which of the 10 markets have seen success or show promise to do so. Some highlights from each country:
The US scores highly when it comes to the investor environment, due in part to a combination of some of the best approaches to portfolio disclosures and more robust requirements on funds to communicate with existing investors on an ongoing basis, in contrast to other markets which place the burden more on distributors and intermediaries. The US balances strong tax incentives and solid policies across distribution and product governance with a relatively weaker retirement system from the perspective of universality. Overall grade: B
The UK scores well with both generous, well-established tax-incentivized investment and retirement saving options; a robust regulatory, distribution, and product framework; and high numbers of people contributing to pensions. However, it continues to have persistently high cash savings rates and low equity and fund investment. Overall grade: B
In Australia, we find weaker portfolio and performance disclosures than peers but a strong superannuation system, a healthy advice framework, and reasonable fee disclosures, which together provide a strong infrastructure for investment. Overall grade: B
Canada is trending toward fewer fee-bundled share classes and picks up marks for the quality of its Fund Facts presale documents, as well as strong retirement and tax-incentivized savings options. Overall grade: B
Japan stands out both for its famously high proportion of retirees relative to its population and its excessively high rates of deposit account savings. It is the market that should perhaps be watched most closely given that interest rates are positive and increasing for the first time in many years, and it has seen its stock market double in the past two years, according to the Morningstar Japan Index. A gradually improving regulatory environment coupled with its successful tax-advantaged Nippon Individual Savings Account shows signs of some cash being moved to investment. Overall grade: B
The EUcountries benefit from a solid base of disclosure and product choice that supports the investor experience, but various EU- and national-level initiatives to grow the investor base are at too early a stage to have had any material impact. For example, Italy (overall grade: C) has started the introduction of auto-enrollment, and Germany (overall grade: C)is seeking to reform its pension system; those legislative changes are expected to be finalized in 2026. Italy and France (overall grade: C)have existing tax-advantaged investment accounts, similar to those recommended by the EU, while Spain (overall grade: C)is also considering their introduction. The Netherlands (overall grade: B)leads among the EU member states thanks in part to its high workplace pension coverage through sectorwide schemes.
What makes a market successful?
Our research shows that there is no single policy lever capable of transforming savers into investors. Instead, successful markets tend to combine several reinforcing elements:
- Well-designed retirement systems
- Accessible investment products
- Supportive tax policies
- Effective advice channels
- Transparent disclosures
- Competitive fees
- Strong investor confidence
Ultimately, the transition from saver to investor depends not only on encouraging participation, but also on creating an environment in which investors can make informed decisions, trust the system, and remain invested over the long term.
