Platforms a double-edged sword
The gatekeeper role that platforms play in determining which investments are easily available presents a huge challenge for the direct property sector, according to a panel discussion hosted by research firm Property Investment Research (PIR).
Speaking on the panel, AMP head of product research and approved product list management Brad Matthews said a large number of advisers achieve efficiency through platforms.
"At the moment we'd say direct property is on the fringe of the mainstream investments for planners, and a key reason for this is because of the lack of assets offered on platforms," he said.
Matthews added that liquidity concerns should not prevent direct property investments from being included on platforms.
"Property investments coming out at the moment are of a higher quality and more client-oriented than previously; however, this hasn't translated into strong representation on platforms," Matthews said.
"In the past liquidity was a critical characteristic for getting on a platform; however it shouldn't be the case that something has to be liquid to get onto one, providing investors are aware of the liquidity restrictions," he said.
Richard Stacker from Charter Hall said there was opportunity for unlisted products to get on to platforms but it needed to be a collaborative process.
"Product providers need to work alongside dealer groups and platform providers to ensure the structures of new products meet the needs of investors but also the platforms, to help bring direct property investments into the mainstream financial planning space," Stacker said.
He added there were opportunities for direct property product providers to be included on platforms, provided they were willing to design their products around platform requirements.
According to Stacker, demand for unlisted property syndicates and funds is increasingly being driven by self-managed super fund investors, with Charter Hall seeing strong interest from trustees and their advisers.
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