Top 5 platforms: 2010

1. BT Wrap and Superwrap

As the financial services industry prepares for a major legislative change, experts claim that platforms remain at the heart of the financial advice industry.

Total funds under management (FUM) stood at almost $400 billion as at June 2010 — a $44.6 billion improvement since June last year. Nevertheless, the industry still expects cautious financial markets in the next 12 months as a legacy of the global financial crisis.

BT Wrap remains the largest platform in the market for the second year running, with over $37.3 billion under management as at 30 June 2010, an almost $6 billion increase since June last year.

Last month, BT Wrap decided to shrink its lengthy disclosure documents to 20 pages, which may contribute to a further increase in the usage of BT Wrap in the future. The company said this move came as a response to feedback coming from dealer groups, advisers and clients.

Westpac Banking Group also acknowledged the contribution of BT’s wrap platforms to the bank’s 84 per cent increase in statutory net profit this year and noted the percentage of active advisers using BT’s wrap platforms had grown by 8.2 per cent over the past year.

2. MLC MasterKey

MLC’s MasterKey platform was launched in 1999 and recently celebrated its eleventh birthday. It remains one of the most widely used platforms in the market. It came second in terms of FUM this year, recording $33.6 billion at the end of June 2010. Like all platforms on the top five list, it performed notably better than the June 2009 quarter, yet worse than March 2010.

In November last year, MLC announced a review of the platform, and as a result, the company appointed Dean Thomas as general manager of MasterKey. MLC confirmed there were new developments pending next year.

3. AMP Flexible Lifetime

AMP does not own a wrap platform and instead rents space from Westpac’s Asgard and Macquarie Wrap.

However, its Flexible Lifetime has done well over the past year to June 2010, recording $27.4 billion in FUM. Flexible Lifetime is now closed to new clients, and the company has replaced it with the super and retirement product called AMP Flexible Super launched in May, which reached $1 billion in assets under management last month.

Flexible Lifetime came third in terms of FUM this year — a place it has maintained since 2008.

4. FirstChoice

Colonial First State’s FirstChoice platform has achieved the status of the largest investment platform in the Australian market for the June 2010 quarter, with its total funds under administration (including FirstChoice Wholesale) rising to $43.6 billion.

However, in terms of its FUM (excluding FirstChoice Wholesale), it ranks fourth, with $23.4 billion under management.

In terms of development, Colonial First State introduced the concept of multiple insurers on platforms earlier this year, adding Asteron as an additional insurer onto FirstChoice.

Although experts note that platform providers will have to enhance their insurance offering to avoid risk of losing business, other players in the market have indicated they are not planning to follow through. FirstChoice’s figures from June 2010 have increased since last year’s $20.2 billion.

5. Macquarie Wrap Solutions

Macquarie Wrap Solutions grabbed spot number five on the Top Five Platforms list, managing over $21 billion in funds, according to June 2010 data. The bank has seen its funds fall more than $1.5 billion since the March quarter.

Macquarie Wrap Solutions began trialling its new model portfolio capabilities in September, and also launched the Pension Update facility in October. It was also named the best overall platform offering in the Wealth Insights 2010 Platform Service Level Report.

However, the Macquarie Group has recently withdrawn from the UK wrap platform market, citing execution challenges and difficult business conditions, but confirmed this would not affect Macquarie’s Australian Wrap operations.