Money Australia — May 2017

The new

generation

push the

envelope on

investment

options and

research

tools

PLATFORMS FOR INCREASING YOUR WEALTH

INVESTMENT

PLATFORM

FUNDS UNDER

MANAGEMENT

DIRECT ENTRY

WITHOUT

ADVISER

CAN INVEST IN

INTERNATIONAL

SHARES

CAN REPORT ON

THIRD-PARTY

INVESTMENTS

BROKERAGE

FEES, AUS

SHARES

ANNUITIES MOBILE

FRIENDLY/APP

IN SPECIE

TRANSFER

Asgard^1 $34bn ✗✓^2 ✓ Min. $25 ✗✗✓

BT Wrap^1 $70.4bn ✓✓^2 ✓ Min. $39^4 ✗✗✓

CFS FirstChoice $79.1bn ✓✗✗n/a ✓ mobile optimised ✗

CFS FirstWrap $9.6bn ✗✗✓Min. $39 ✓ mobile optimised ✓

Hub24 $4.6bn ✗✓✗0.11% ✗✓✓

Macquarie Wrap $60bn ✗✓✓yes ✗✓✓

Netwealth $11.4bn ✓✓✗$20 ✗✓✓

OneVue $3.8bn ✓✓^3 ✓ Min. $22 ✗✓✓

Panorama^1 $3.7bn ✓✓^2 ✓ Min. $12.50 ✗^5 ✓✓

Powerwrap $5.9bn ✗✓✓Min. $19.80 ✗✓✓

(^1) These are BT platforms. All platforms offer consolidated reporting and account-based reporting, allow you to invest in managed funds and term deposits and offer choice of adviser. All except CFS First Choice allow you to
invest in Australian shares and ETFs.^2 Via managed funds.^3 Via managed accounts.^4 Trades placed via the portfolio service facility have a minimum charge of $19.95.^5 Coming in 2017.
FirstChoice and FirstWrap won the Investment Trends
new functionality award for allowing annuities onto
their platforms.
Efficient and frictionless
Beyond ubiquitous price considerations, what all plat-
formsnowrecogniseisthatplannerefficiencyand
“frictionless” engagement are the battleground on which
newclientsarewonandlost,saysChoi.
Nevertheless, the bigger issue confronting platforms,
accordingtoMattHeine,jointmanagingdirectorof
Netwealth, is explaining to investors exactly what a
platform is. While there’s no single definition, they’re
firstandforemostinvestmentumbrellasthatwrapup
sophisticated transacting, reporting and research tools
withinasingleclientportal.
Once they understand this, the biggest questions
confronting investors, says Glen Killen, of financial
consultant Avalonfs, are “What can and can’t I do within
myownpersonalnamewithinanygivenplatform?”
and“Howuser-friendlyisit?”.
He says greater functionality together with consol-
idated reporting are convincing investors/advisers
to favour platforms over self-managed super funds
(SMSFs). However, it’s not uncommon for financial
advisers to operate an investment platform for a client
in conjunction with an SMSF, typically when there’s
propertyinvolved,saysKillen.
“Itdoesn’tdoanythingyoucouldn’tdoyourselfbut
thebeautyofaninvestmentplatformisitsabilityto
generate consolidated tax reports, which ensure you
don’tmissoutonanythingwhilesavingyoutime,”
says Killen.
In addition to being independent, new platforms are
trying to differentiate themselves from bank-controlled
platforms by pushing the envelope on investment options
andresearchtools.Thatmeansgoingwellbeyondbasic
functionality, such as investing in managed funds, term
deposits and cash, and direct shares.
Akeypointofdifferentiation,saysKillen,isaplatform’s
ability to offer separately managed accounts (SMAs)
and incorporate third-party assets (off-platform invest-
ments) that provide a complete picture of assets when
itcomestoreporting.“Arguablyattractinginvestorsto
newentrantslikeHub24istheiraddedfunctionality,”
says Killen. “To attract new business, newcomers tend
toallowin-specietransfers–bothinandout–and
bank-owned platforms have followed suit.”
Another competitive advantage that new gens have
over the bank-controlled platforms, says Heine, is that
they’re typically not managing illiquid assets that can
only be bought or sold at certain intervals.
Innovation rules
With the fee structures becoming increasingly
indistinguishable between providers, Choi says it’s
“real” innovation that is now becoming a key point of
difference between platforms.
Unlike 2013-15, when most of their development
budgetswereconsumedbycompliancecosts,hesays
2016 saw bank-controlled platforms turbocharge their
spending on developing new functionality for planners
and their clients. For example, after a lot of technology
issues, it’s understood Westpac’s BT Panorama spent
up to $1 billion upgrading its wealth management
technology platform.
With this sort of money being thrown at platforms,
Killen says that when it comes to comparing one or
more providers, the devil is increasingly in the detail.
For example, does a platform offer real-time and/or