Powerwrap launch given long odds
|
|
Some industry commentators are giving independent platform provider Powerwrap scant chance of success with the scheduled launch of its consolidated wrap offering this month.
Commentators suggest it is a particularly challenging time to launch the wrap, pointing to ongoing consolidation in the sector and recent failures, including Credit Suisse.
The launch follows the signing of a limited exclusivity agreement with Praemium in November last year, giving Powerwrap access to its V-Wrap technology and the ability to mine its customer base.
Powerwrap chief governance officer Peter Rowley said the agreement would give the wrap, which will initially offer a direct equities product and a separately managed account, a “key point of difference”.
“With Praemium having made major inroads into the accountant market through V-Wrap, and with our platform being based on V-Wrap, our platform forms a bridge between the planner and accountant roles.”
Powerwrap claims it will launch with three foundation clients, which it said are listed entities offering a combination of financial planning and accounting services that already use
V-Wrap.
However, Michael Heine, managing director of platform Netwealth, said he “could not possibly imagine a worse time” to launch a platform in the market.
One of the many challenges faced by the start-up, he said, is that planners will be “extremely cautious about its ability to survive in the long term”.
“The last thing an adviser would want to do in
the current market is move their clients on to a new platform which may
or may not survive.”
Heine said Credit Suisse was unable to make its wrap work even in a bull market, despite being a top-performing fund manager.
Wealthtrac head of distribution Matthew Johnson said clients are looking for a total solution, including direct shares, a full comprehensive insurance product and access to wholesale managed funds at a competitive price.
“That’s what a tier-one platform looks like in the present day market, and you need to be able to operate at this level if you are to be successful in the marketplace.”
Recommended for you
The new financial year has got off to a strong start in adviser gains, helped by new entrants, after heavy losses sustained in June.
Michael McCorry, chief investment officer at BlackRock Australia, has detailed how investors are reconsidering their 60/40 portfolios as macro uncertainty highlight the benefits of liquid alternatives.
Having reset its market focus to high-net-worth advisers, Praemium’s administration solution has been selected by Bell Potter in a deal that increases the platform's funds under administration by $6 billion.
High transition rates from financial advisers have helped Netwealth’s funds under administration rise by $3.7 billion in the fourth quarter of FY25.
