With more consumers looking for holistic services, the next five years will see an explosion of one-stop shop solutions for wealth management products, and Australian platform providers will need to prepare for increased competition, Bravura predicts.
In a new white paper to be presented at the 15th Annual Wraps, Platforms & Masterfunds Conference in the Hunter Valley next week, Bravura director for product and strategy Darren Stevens says that by 2020, a big challenge for platform providers will be deciding where to fit into a "brokerage solutions value chain".
"Increasingly, front-end distributors will effectively serve as brokerage solutions that sit on top of disaggregated back ends comprising specialist offerings across the wealth management spectrum," he said.
"At the front end, brand, trust and alliances will become paramount and this opens the door to non-traditional players who wish to enter the wealth management marketplace."
Mr Stevens used Woolworths and Coles as examples of non-traditional players who might dip their toes into the wealth management market in the coming years.
"Given these companies enjoy extremely large and loyal existing customer bases, it is surely only a matter of time before one or both seek to significantly disrupt the Australian wealth management market with a front-end, one-stop shop offering that brokers a wide variety of financial services," he said.
"How will Australian platform providers compete with these domestic brand giants? Could they be joined by a new international entrant like PayPal, Apple or Google?"
A surge of one-stop shop solutions is just one of five future trends that platform providers need to be aware of, according to the white paper. Other potential disruptions include a customer base demanding mass personalisation, a push toward near-free use of platforms and an increase in digital payments and cryptocurrencies.
The Australian wealth management industry has been slow to innovate compared to other Australian sectors, Mr Stevens said, and it is hampered by a complex web of legacy technology.
"In the next five years, hot on the heels of the current wave of trends, further social and technological trends are poised to transform global business practices as we know them and, in turn, irrevocably alter the Australian wealth management landscape," he said.
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