The battle for platform FUA is well and truly on, with incumbents roaring back into the market to tackle the inflows going towards HUB24 and netwealth and with Super funds now grappling with post-retirement monies exiting their funds. Whilst the high inflationary environment has seen flows somewhat muted, the tailwinds remain, especially if rates do start coming down in 2024, as is now being predicted in some circles (we’ll leave the forecasting to the economists!).
With ProductRex - Adviser Ratings’ free fee product comparison (across super funds, platforms, asset managers, SMAs, etc.) and record of advice tool - we are starting to see where flows are going in real time. Which platforms are winning? And which Super funds are more exposed to the platform v Super fund race in the retirement space? With over 3,000 users (including paraplanning outfits) representing 4,800+ advisers, there is now $1.5billion of client funds being modelled every month. From a standing start only 2 years ago.
Chart - Q2 – 2023 - Platform Driver Sentiment Report (Fund Flow Intentions)
Source: Adviser Ratings
Whilst the audience is limited to only the current 3,000 users, we are seeing intended flows still heading to HUB24 and netwealth, with BT Panorama and AMP North making inroads. We note this data was before the push by CFS on the back of its Edge platform launch. Part of the latter brigade is by virtue of their size and the type of client demographics of those advisers as their clients’ transition into retirement, out of the Super funds, and into the adviser’s platform of choice.
The smaller platforms like Mason Stevens and DASH are coming from a relatively low base. Accordingly, intent should remain overwhelmingly positive whilst in flow growth mode. Both platforms will be hyper-focused on targeting their platform investment based on both their adviser demographic and the key drivers to what may make an adviser switch – especially in what has been traditionally a very sticky decision.
However, with QAR, aggressive platform marketing and competition, as well as a move by advisers into the small / micro licensee space continuing to pick up pace, decision-making to switch platforms by advisers is expected to peak over the next 2-3 years, presenting significant opportunities for platforms to get it right. A great time to be an adviser around platform choice.
We have distilled it down to eight key drivers, in order of criteria, for advisers when choosing or switching investment platforms:
1. Adviser Experience: This involves an innovative and responsive approach to adviser concerns, continuous improvement, and intuitive technology. Advisers look for platforms that actively evolve and cater to their needs.
2. Client Experience: The focus here is on a modern interface with efficient reporting, slick functionality, and an excellent client experience. A platform that offers a seamless and engaging experience for clients is highly valued.
3. Ease of Client Onboarding: The speed and efficiency of onboarding new clients are crucial. Advisers prefer platforms that are user-friendly and provide ample support and guidance throughout the onboarding process, simplifying administrative tasks.
4. Platform Functionality: Automation, digital features, user interface (UI) and user experience (UX) enhancements, and constant investment in the platform are important. Advisers seek platforms that are advanced and continuously improving.
5. Platform Price: The overall cost and value proposition of the platform are significant. Advisers evaluate the pricing structure, including cash management rates (in this environment) and how pricing varies for different functionalities.
6. BDM Support: Business Development Manager (BDM) support is critical. Advisers value BDMs who are always available, knowledgeable about platform features and products, understand competitive offers, and are proactive in problem-solving.
7. General Adviser Support: This includes the availability and quality of call centre help, understanding of administrative processes, consistent feedback mechanisms, and the accessibility of online or call centre assistance. Effective and reliable support structures are essential for advisers.
8. Overall Investment Options: The quality, suitability, flexibility, and customisation of investment options, including Separately Managed Accounts (SMAs) and alternative investments, are key factors. This consideration was near the top several years ago, but has now become general hygiene for platforms (at least in advisers’ eyes) to remain competitive. Advisers also strongly consider the competitive pricing of these investment options.
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