Praemium to expand under fee-for-service
Portfolio administration company Praemium is set to expand as a result of the impending shift from commissions to fee-for-service, according to Praemium’s group chief executive officer, Arthur Naoumidis.
Naoumidis said that as financial planners moved to fee-for-service, strategy-based separately managed accounts (SMAs) would become more popular with planners, and Praemium was seeking to “ramp up” the exposure of those SMAs as a result.
Strategy based SMAs, which are based around a full asset allocation SMA and wrapped around a client’s entire investment portfolio, were more popular with fee-based planners, Naoumidis said.
The current crop of SMAs in Australia were product-based and replaced a single fund, he said.
Naoumidis also pointed to the banning of commissions in the United Kingdom (UK) as spurring the move of clients' assets to investment platforms, and said regulatory changes in Australia should be as beneficial towards Praemium's platforms as it was in the UK.
Praemium has approximately 40 firms that have signed or are planning to sign with Praemium’s UK platform as a result of the changes, he added.
All Praemium’s financial planners charge fees, and Praemium is looking towards the increase of its “natural market” as more planners move to fee-for-service, Naoumidis said.
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