Will investment platforms merge with software?

Mastertrusts have become a very popular investment vehicle with planners due to the wide choice of investments and the simplicity of processing.

Master trust providers have been making it easy for planners by offering planning software as part of the package.

The theory is that once the planner is using the planning software, they will continue to put clients’ money into the master trust. The more inflows, the more fees, but is this the pattern for the future?

Navigator managing director Marc Mengler says many of the major master trust providers are now linked to financial planning software. Navigator offers FPI, while Asgard is linked to Wealthpoint.

“The major master trust providers all offer financial planning software. The question is, who is going to challenge the top three by offering something else?” Mengler asks.

The key to winning planners is to offer straight-through processing from the front-end to the master trust, he says.

And it is processes such as this driving usage, he says. Mengler believes a good system is one providing value to the planner while satisfying their on-going needs, including satisfying the client.

Planners are also looking for simple solutions and do not want to be using half-a-dozen different systems. While Australia is a small market, that hasn’t meant that all platforms and software interface together.

Mengler says providing one platform for the planner improves business efficiency. For the master trust provider, this helps develop a long-term relationship between the two parties.

Avanteos chief executive officer Mark Papendieck argues the platform and the product provider should be regarded as, and remain, separate.

“The platform is a system and master trusts and wraps are products that are sold through investment platforms. But at the end of the day, master trusts are only products, which draw together a range of investments,” Papendieck says.

He also says people should not confuse the two and there are cases where platforms are being sold as products.

“We believe in total separation of the two areas. The platform is very important and should include a range of services such as databases, financial planning workflow models and document imaging.”

Papendieck sees platforms linking up with many new areas, such as superannuation and marketing risk products.

Summit national manger Annette King also believes the planners are looking for an end-to-end solution, but doesn’t believe a master trust will provide all the solutions. Summit has linked with VisiPlan, which provides a direct feed into the master trust.

“We chose a platform that could offer a seamless service between the master trust and the planner. We don’t see that it has to be the same system, but it must be easy for the adviser to use,” King says.

One of the problems with Norwich Union’s withdrawn planIT software, which is to replace FPI, was that it was too complicated to operate, slowing down producing plans.

This proves that providing the right software is crucial for the success of the master trust. At present, Navigator says its inflows have not been affected by the problematic software, as the tried-and-tested FPI software is still being used.