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Standard & Poor’s assigns ‘STRONG’ rating to HUB24’s Portfolio Service SMA Platform

10 Feb 2011
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HUB24, a wholly owned subsidiary of ASX listed stockbroker and wealth management utility, Investorfirst Limited (ASX: INQ), is pleased to announce that following the inaugural review by Standard & Poor’s (S&P) Funds Services, that HUB24’s SMA Platform was given a ‘STRONG’ rating.

In its report, S&P noted that the ‘ “STRONG” rating reflects the benefits of a strong product and service offering, timely execution of portfolio managers’ investment decisions, cost effective management of trades, and a technology platform that is convenient for advisers and portfolio managers.’

The review went on to say that, ‘having now established an extensive product and service offering, advisers have the ability to use the platform as their main or sole investment implementation application. The service is convenient and simple to use for advisers and portfolio managers. Additionally, the service provides direct data feeds (EPI 4.0) into the largest adviser software applications.’

Commenting on this review, Chief Executive Officer of Investorfirst, Mr Darren Pettiona, said “It is pleasing to receive independent confirmation of the HUB24 SMA platform. We have a strong and stable team, with each member playing an equally important role in our success.”

“S&P’s review process is extremely thorough and this rating not only recognises HUB24’s development achievements but also our deep understanding of SMA specific risks and commitment to very high implementation standards – all critical components of efficient, transparent and effective portfolio delivery to investors.”

The key strengths stated in the report include:

  • Cost effective management of trades, both in relation to brokerage rates (5.5 bps) and the minimisation of market impact price risks.
  • Investment decisions are implemented on a same-day or next-day basis, greatly mitigating a number of SMA-specific risks.
  • The platform’s online tools are convenient for both advisers and portfolio managers.
  • The SMA product range is large, with 25 investment managers and 58 SMA model portfolios. The platform also provides access to a broader asset-class menu, including managed funds, exchange traded funds (ETFs) and direct equities.
  • Internally developed IT systems that, among other things, enable the manager to respond to client requests for additional functionality.
  • The management team has a strong pedigree and a proven track record in the development of financial planning software.
  • Model portfolio managers are empowered to easily manage and maintain their portfolios through an online “work bench”.
  • Reporting of performance differentials between a model portfolio and unit trust version (where one exists) provides advisers valuable transparency regarding the efficiency of the model portfolio.
  • As a part of the review process S&P noted that it believed that ‘the risk that the service will be discontinued at some future point is extremely remote based on the manager’s financial position, the strategic importance of HUB24 to the growth prospects of the listed entity that owns HUB24, and solid client prospects based on the strength of the service offering.’

A full copy of the S&P Report is available on the Investorfirst Ltd website http://investorfirst.com.au/archives/1235

Additionally more information about S&P’s SMA ratings approach can be found in the explanatory guides: ‘Guide to S&P SMA Model Portfolio Ratings’ and ‘Guide to S&P SMA Model Platform Ratings’ on the Standard & Poor’s website http://www2.standardandpoors.com/portal/site/sp/en/au/page.article/2,4,2,0,1148442711865.html

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