Praemium pivots to be leading platform in HNW advice
Praemium is pivoting the business to offer a “white gloves” service as it targets the high-net-worth (HNW) market through a three-year strategy.
Speaking at the firm’s Investor Day, chief strategy officer Denis Orrock said the firm is looking to be the platform of “sophisticated wealth” and the leading platform for HNW advice.
In the HNW segment, there is an investable market of $3.2 trillion, he said, and over 1 million HNW investors.
“We see this as a significant opportunity for advice groups and by virtue of that, a significant opportunity for Praemium. The private wealth market is our target market and HNW advisers are driving the future of wealth management.”
The platform aims to differentiate itself in the HNW market in two ways: by service excellence and by being solution-focused. This will include crafting solutions which are unique to the HNW market, collaborating with clients on product development, providing a proactive and client-centric service.
“We have reset our market focus and are skewing to where we are strong in the HNW advice space. Our acquisition of OneVue [from Iress] is aligned with that as 70 per cent of the funds under administration there represent significant HNW advice groups who will be new to Praemium post-migration.”
Money Management previously covered comments from his colleague Brett Marsh, head of OneVue integration, regarding the progress of Praemium’s integration with OneVue which was acquired in April.
“We look for synergies between the two firms so shareholders can get value too. The approach we are taking is a progressive approach. We won’t just be waiting until the end. We are looking at opportunities as they arise and capturing the synergies early,” Marsh said.
Another factor contributing to the desire to focus on HNW is the growth of HNW investors and advisers who are seeking to invest in alternatives. Double the number of HNW-focused advisers say they see having access to a broad range of assets as growing in importance to them compared to non-HNW advisers.
Looking at their product usage, there is a clear growth in the number of HNW advisers using alternative assets at 69 per cent compared to 34 per cent for non-HNW advisers. Some $6 billion in alternative assets is already held with Praemium, and it said this is growing at circa 20 per cent per annum.
In terms of its long-term target, Orrock said he wants Praemium to be the leading platform for HNW advice. This will consist of dominating the non-custodial market, being the platform of choice for sophisticated custodial and being a leader in the back-office broker space.
One in three HNW advisers are already servicing non-custodial assets, and Orrock said Praemium has $30 billion in funds under administration assets in that area.
“We already dominate the non-custodial market in our space and want to broaden the gap with our competitors. We want to be number one for a long time to come. There is a great opportunity for us to provide both custodial and non-custodial for our clients.
“Our clients want the best and we aim to provide that with a clear client-centric proposition. What was great two years ago is only good today, so we need to constantly improve across that.”
AUTHOR
Laura Dew
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