The new Investment Trends Platform Report found that providers have been focusing on addressing calls from financial planning groups for enhancements to usability, reporting and support.
Investment Trends senior analyst Recep Peker said regulatory compliance absorbed around half of platforms’ total development expenditure in 2013.
“But the platform functionality arms race has continued,” said Mr Peker. “Platforms continue to evolve through offering planners tools that help them run their business more efficiently while meeting their regulatory obligations.”
Platform providers have also responded well to planner calls for direct shares and corporate actions functionality, as well as building fee disclosure statement (FDS) functionality “from scratch”, said Mr Peker.
“The level of development is reflective of the high level of competition in the industry. Platforms can very easily be overtaken by rivals if they do not keep innovating and meeting planners’ needs,” he said.
When it comes to FDS functionality specifically, the response of platforms has been “varied”, according to Investment Trends.
“A couple of platforms are still waiting on the reforms to find more concrete footing, while others gave planners a CSV document detailing the fees and leaving it to them to establish their own ways of delivering on their FDS requirements,” the researcher said.
“The majority of platforms have gone further, with functionality tracking key dates and services provided, alerts and FDS generation.
“The most feature-rich FDS functionality was delivered by Asgard eWrap, which includes bulk (multiple clients at the same time) FDS generation,” said Investment Trends.
According to the report, the top four platforms by FDS functionality are Asgard eWrap, Macquarie Wrap, Perpetual Private Wrap (equal second) and BT Wrap.
When it comes to full-function platforms (with a wide range of investments including direct equities) the top five according to the report were CFS FirstWrap, netwealth, Asgard eWrap, MLC Wrap & Navigator, and HUB24.
The report was based on face-to-face reviews of 25 leading master trust and wrap platforms.
Of the 13 platform providers assessed, eight provided information on both their development and regulatory compliance expenditure separately.
Investment Trends found that their spend on developing new functionality was only slightly greater than their spend on regulatory compliance.
I personally like Industry Super Funds that offer direct investments into shares and ETFs rather than Wraps, due to its low fees.
I personally like Industry Super Funds that offer direct investments which also include ETFs which sometimes are more attractive than the options in Wraps due to it’s fees..
Interesting reading the headlines re: BTWrap another reason for direct ownership!
I think platforms are at the cross roads. With the increase in functionality available in adviser software providers such as Xplan, Coin etc platforms are beginning to be less relevant. It will be an interesting 2 years ahead to see which way advisers go.
While platforms are “racing” independent thinkers are opting for non platform solutions that return more to the adviser and provide clients with better safer outcomes. Since platforms are mostly about reporting and trading , or should I say accounting and trading , new direct options such as mFunds and ETF’s will not require platforms to trade. I would like to see a research house do a proper cost analysis of platforms, as apposed to direct solutions I think this would surprise many.