Delivering platform Alpha
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Financial advisers currently face a challenging environment, with interest rates at historic lows, significant market volatility and increasing regulatory pressure to satisfy clients best interests.

The COVID-19 pandemic is adding to the uncertainty. Periods such as these emphasise both the value of good advice and the role of technology in providing solutions to protect and create value for clients. Managed portfolios have proven to be a popular investment vehicle for advisers, providing their clients with access to cost-effective professional investment manager expertise while the client retains the benefits of beneficial ownership in IDPS and the Trustee retains these benefits in Super. Evidence of these benefits is the impressive

growth in Funds Under Management (FUM). As of December 2019, FUM in managed portfolios in Australia stood at over $72 billion Australian dollars, representing a Compound Annual Growth Rate (CAGR) 11%3. On HUB24, managed portfolio Funds Under Administration (FUA) has been growing at a much faster compound annual growth rate of 57% over the past four years.

Adviser adoption of managed portfolios has been supported by enhanced functionality driven by innovation available on platforms, which can provide additional benefits to clients.

Over the past couple of years, competition in the broader platform and superannuation market has focussed on fees, with the emergence of flat fees combined with cut down investment menus. While product choice is critical to service the advice needs of different client segments, focussing on price alone could come at the cost of significantly increased client value-driven by product capability available on platforms.

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