EXCLUSIVE The investment management giant has urged advisers to adopt a number of fresh approaches to managing their practices, including their commercial model and use of technology.
Speaking at the AIOFP Offshore Conference in Lisbon late last month, Legg Mason’s international head of alternative strategies, James Verner, said new economic models are evolving in the wealth management market.
“What we are looking to create is a better revenue alignment between asset managers, wealth managers and financial planners. That ultimately creates better value for money for the end customer,” Mr Verner said.
“Customers are prepared to pay for advice and active management. While we see downward pressure on fees, we also see an opportunity to create better solutions.”
Mr Verner pointed to the US market, which has seen a dramatic reduction in advice businesses that solely rely on commissions for income.
“This has created an amazing opportunity for businesses that have been able to charge a fee for service and also harness technology. Those businesses are now seeing very attractive valuations, particularly when that tech flavour is added to the mix,” he said.
Mr Verner told Australian advisers that they should “experiment with their commercial model” and the value alignment between client and adviser.
“You need to think about subscription models and more transparency,” he said.
Last year, Legg Mason made a strategic investment in Hong Kong and Sydney-based wealth technology provider Quantifeed, the brainchild of Australian investment banker Ross Milward. The company provides bespoke business-to-business systems for institutions to provide advice and tools for their adviser clients and investors.
“We have been working on Legg Mason’s strategy for intermediaries, what they needed into the future and what we were able to provide. We have been investing a lot in technology. The crucial thing, we think, is to have an open-market play, not a Legg Mason play,” Mr Verner said.
APRA-regulated super funds could create better member outcomes by taking the sam...
Australian high-net-worth investors lost more money than their global counterpar...
The negative impact of COVID-related market volatility on clients’ super inves...