Fees prompt advisers to manage assets off-platform
Almost a quarter of client portfolios are being managed off-platform, according to Investment Trends, as a way of avoiding high platform fees.
Research commissioned by Praemium with Investment Trends data found 59% of advisers were administering a portion of portfolios off-platform. This included for term deposits, Australian Securities and Investments Commission (ASX) listed shares, exchange traded funds, commercial property and private equity holdings.
The top reasons planners chose to do this was because platform admin fees were too high as a percentage of assets, certain assets were unavailable on platforms, and clients wanted to retain a level of control.
However, the downside of holding assets off-platform was that they spent almost twice as much time collating information for reporting compared to for assets held on platforms and only reported to clients twice a year on average.
The average number of platforms used by advisers was 2.6, the highest since 2017.
Praemium chief commercial officer, Mat Walker, said: “There is a strong desire to shift this reporting burden to a technology solution and be able to administer and report on 100% of a client’s assets and wealth.
“Planners perceive they need to use multiple platforms to satisfy client best interests. However, they aspire to have one platform that can deliver to all client segments, catering for all forms of managed accounts and investments, including custodial and non-custodial assets.”
AUTHOR
Laura Dew
Recommended for you
Digital advice tools are on the rise, but licensees will need to ensure they still meet adviser obligations or potentially risk a class action if clients lose money from a rogue algorithm.
Shaw and Partners has merged with Sydney wealth manager Kennedy Partners Wealth, while Ord Minnett has hired a private wealth adviser from Morgan Stanley.
Australian investors are more confident than their APAC peers in reaching their financial goals and are targeting annual gains of more than 10 per cent, according to Fidelity International.
Zenith Investment Partners has lost its head of portfolio solutions Steven Tang after 17 years with the firm, the latest in a series of senior exits from the research house.
