Execution-only product circumvents platforms

planners financial planners financial planning ASX Software funds management chief executive

9 October 2013
| By Staff |
image
image
expand image

Financial planners will be able to bypass platforms and access managed funds directly via a new execution-only service to be launched by investment administration services provider PowerWrap.

PowerWrap chief executive Cormac Heffernan said the service, called MWH Transaction Account, would allow planners who run their own portfolio administration to invest in managed funds alongside direct equities and exchange traded funds (ETF).

He said the cost of using the service would be based on transactions fees only, which would start at $20.50, as well as the applicable costs for the investments.

"Many platforms force advisers to use their technology and the features they have designed, while we believe there is a market for people who choose their own tools and use what they want," Heffernan said.

"What we are offering is a wrap account without the administration overlay or costs that planners can use as a single application to automate managed funds transactions undertaken for clients," he said.

Heffernan said planners would be able to create a Statement of Advice and investment strategy with their own internal systems and then place investments directly via Powerwrap, which would provide the necessary administration, reconciliation and reporting on the trades and the portfolio.

Iress senior business development executive Michael Kinens said Xplan had been in discussions with Powerwrap about providing access to the service through the desktop planning software, and beta testing was currently underway.

Xplan currently offers equity trading facilities directly into the ASX via the share trading systems of parent company Iress.

Kinens said the service would offer planners similar functionality to the Aqua II Managed Funds Service (MFS) system being proposed by the Australian Stock Exchange but at a cheaper cost to planners.

If adopted in its current proposed form, the MFS system would allow investors to apply to redeem unlisted managed funds on the ASX using its electronic settlement system, CHESS, via an ASX broker.

The MFS will offer access to funds covering domestic and overseas asset classes not currently traded on the ASX and would be held and administrated in the same manner as listed investment companies and ETFs.

However Kinens said he did not expect high planner usage of the MFS as most planners had settled administration systems and processes and would be unlikely to adopt a further system to access managed funds via the ASX.

His comments follow those of platform providers at the recent Money Management Platforms and Wraps Conference, who expressed concern over the rollout of MFS and its ability to bypass them in providing managed funds investments.

However the Powerwrap service and MFS may prove useful for boutique managers looking to bring new funds to market without having to pay the costs associated with a platform.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

GG

So shareholders lose a dividend plus have seen the erosion of value. Qantas decides to clawback remuneration from Alan ...

2 months 3 weeks ago
Denise Baker

This is why I left my last position. There was no interest in giving the client quality time, it was all about bumping ...

2 months 3 weeks ago
gonski

So the Hayne Royal Commission has left us with this. What a sad day for the financial planning industry. Clearly most ...

2 months 3 weeks ago

Insignia Financial has made four appointments, including three who have joined from TAL, to lead strategy and innovation in its retirement solutions for the MLC brand....

1 week 2 days ago

Having divested its advice business in August, AMP is undergoing restructuring in at least four other departments amid a cost simplification program....

4 weeks 1 day ago

The Reserve Bank of Australia's latest interest rate announcement has left punters disheartened on Melbourne Cup Day....

1 week ago