Recep Peker

Investment platforms used by financial advisers have ramped up functionality and pricing innovation in their bid to deliver better client outcomes and win market share, according to the 2024 Platform Market Wrap released by SuitabilityHub today.

The comprehensive report provides a detailed analysis of Australia’s 14 major platforms and investment administration solutions, offering valuable insights for financial advisers and product providers.

Key insights include:

• Platforms are rapidly modernising their digital capabilities, akin to apps like Uber, allowing advisers to efficiently self-serve and track tasks in real-time, ultimately enhancing their service to clients and reducing call volumes to the platform.
• The focus on improving client outcomes is evident through innovative propositions such as zero administration fee products like CFS Edge Accelerate 100 and HUB24 Discover, aimed at addressing advice affordability and competing with industry funds.
• Noteworthy platform enhancements include North’s addition of fractional shares in managed accounts, CFS Edge’s division of client accounts into sub-accounts for greater flexibility, and CFS FirstChoice’s streamlined origination journey, all contributing to adviser efficiency gains and improved client outcomes.

Advisers can gain access to the 2024 Platform Market Wrap by subscribing to the SuitabilityHub research software.

Modernisation of digital self-service

Platforms are paving the road towards a state where they can be true digital offerings that allow advisers to self-serve more efficiently. A key focus of the industry over the last year has been on enabling advisers to place more instructions online without filling forms, processing them without human intervention in their back-end, and facilitating real-time tracking over such service requests.

“We are seeing platforms modernising to become more like everyday apps, such as Uber or Amazon, when facilitating requests from the adviser office,” said Recep Peker, Managing Director of SuitabilityHub. “There is a growing range of instructions advisers can simply provide through the platform’s online interface, and then track their status in real-time through platform work tracker.”

“When platforms are prompt and transparent, when they execute well, it helps the adviser look good in front of their clients. It’s one of those things that helps build trust in the adviser-client relationship.”

Key developments in this area include BT Panorama’s continued investment in its workflow tracker, which launched in late 2022 with the innovation of providing advisers estimated completion dates for tasks based on a 7-day rolling average. In 2023, BT incorporated the tracker into its adviser mobile app and built proactive features such as providing task-specific forms through the tracker. HUB24, Macquarie Wrap and North each added greater granularity to their respective workflow trackers, helping advisers better follow progress and identify if the next action is on them, the client or the platform admin team.

“Platforms that are modernising their digital self-service offerings are reporting significantly reduced call volumes, as client service officers now have a compelling alternative to waiting on hold to get an update on a specific task,” said Peker. “This allows both the adviser office and the platform service centre to dedicate themselves to more value-add activities.”

Improving client outcomes

In tandem with the advancements in digital self-service, platform providers are focusing on enhancing client outcomes. Client best interest duty looms large in the minds of advisers, and platform providers strive to win advisers over with propositions that enable them to better demonstrate they are acting in the best interest of clients. Three key levers are being pulled to achieve this: fees, targeted additions to the product suite, and new functionality.

The last months of 2023 saw the launch of two next generation propositions with cheaper SMA-based menus. The new offerings from HUB24 Discover and CFS Edge Accelerate leverage scale and manager relationships to deliver zero or discounted platform administration fees to clients, targeting a total cost to client of less than 1%.

“CFS Edge’s Accelerate Series and HUB24’s Discover represent big steps in helping advisers address the issue of advice affordability,” said Bailey Hao, Senior Analyst at SuitabilityHub. “Their range of associated cost benefits, most notably a zero or reduced platform administration fee, places them in a very competitive position against industry funds.”

From a product perspective, there is a particular focus on delivering solutions to help advisers service the pre-retiree and retiree markets. North has been leading the way with its MyNorth Lifetime suite to provide a guaranteed stream of lifetime income, which afford advisers the flexibility of a wrap account while granting clients a variety of tax and social security benefits. Meanwhile, HUB24 and Netwealth have natively integrated Allianz Retire+ AGILE and Challenger fixed-term annuities respectively, allowing advisers to administer these solutions like other investments on the platform.

Our favourite innovations

Each year, a number of platform enhancements stand out for their ability to improve client outcomes, create adviser efficiency gains, and be innovative. Looking over the past 12 months, our favourite innovations include:

• North facilitating fractional shares in managed accounts: This innovation will enable advisers to recommend SMAs to more clients, particularly those with lower balances, democratising client access to SMAs and improving client outcomes from better tracking of the manager’s target model and reduced cash drag.
• CFS Edge dividing client accounts into sub-accounts: This simple yet high impact innovation delivers greater flexibility and ease in implementing advice strategies. For example, by making applying a bucket strategy for retirees easier. Not having to set up multiple accounts also helps reduce administrative burden, such as effort in generating reports.
• CFS FirstChoice’s new origination journey: Facilitated by Elemnta and its integration with Xplan, this delivers significant time savings when opening platform accounts. It includes pre-populating data from Xplan, setting up multiple accounts across a family group in one go, completing multiple forms without re-keying data, and two-step rollovers to save time in situations where the original super fund has insurance attached.

Many more great innovations that benefit advisers and their clients are listed in the full report.

About the report

The inaugural edition of the SuitabilityHub Platform Market Wrap provides a comprehensive view of Australia’s platform industry. Designed for financial advisers and product providers, the report covers the latest changes to platform propositions and reviews the cost and feature competitiveness of Australia’s most widely used platforms.

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Recep Peker

SuitabilityHub brings fresh perspective to platform selection beyond just cost

Picking the right investment platform to partner with can be vital to the success of an advice business. SuitabilityHub, a financial product research software designed for the post-QAR world, aims to make that choice clearer and more informed, moving past the typical focus on fees.

After speaking with many advisers and licensees, it’s clear that many base their decisions on costs. The challenge? Explaining why a client should choose a certain platform when there’s a cheaper option out there.

“Our discussions with advisers showed a pressing need for a broader perspective on platform selection,” says Recep Peker, Founder and Managing Director at SuitabilityHub. “While costs are certainly important, there’s a multitude of other factors that advisers need to have on their radar, and we aim to bring those to the forefront.”

The platform functionality arms race is driving more nuanced propositions.

Platforms are not just about administration, custody, and reporting anymore. Most deliver a full suite of world-class functionality, while advisers in countries like the U.S. often need to plug multiple solutions together just to get the same capability. Strong competition between providers means proposition innovation is set to continue.

“We are now seeing many platforms in the process of evolving to play a more central role in an adviser’s practice,” said Peker. “This transition suggests a paradigm shift where platforms aren’t just tools but partners that assist advisers in delivering top-notch service.”

For example, SuitabilityHub analysis of recent platform enhancements reveals some platforms are continuing to invest into strengthening their ability to capture data and report on clients’ off-platform assets, which can be a great timesaver for advisers focused on high-net-worth (HNW) clients. While these platforms may be more expensive than the rest, the reduced manual administrative work and the benefits for HNW clients of seeing all their assets together in one place could justify the additional administration fees.

Meanwhile, some platforms are forgoing these bells and whistles and instead are doubling down on maximising advisers’ capacity to serve. They have been investing heavily in streamlining processes, digitising, and providing excellent service and support, and advisers focused on certain client segments such as retirees or the mass-affluent market may find these solutions more suitable.

Facilitating a more holistic approach to Best Interest Duty

SuitabilityHub empowers advisers to consider the unique needs of their target customer and then pinpoint which platforms can best meet these needs. This is all done through a guided decision-making tool which walks users through the process and enables them to demonstrate the steps they took to act in the best interest of their clients.

An interesting discovery from the SuitabilityHub research was when comparing leading platforms like HUB24 and Netwealth. At first glance, they seem quite alike, as they have a similar number of features. But a closer look reveals that only about 60% of their features overlap. Peker adds, “Every platform has its own way of distinguishing itself, which is why understanding those unique points can make all the difference in selecting the most suitable platforms.”

“We have seen many case studies that illustrate how your platform selection may vary if you choose them based on the features you need to serve your target market, rather than relying exclusively on fee analysis.”

A significant aspect of SuitabilityHub’s value proposition lies in its ability to offer a transparent analysis of platforms across their functionality, business metrics and cost. With over 500 features documented and continuously updated, advisers can fine-tune their selections based on their business needs and their clients’ expectations.

“We have a unique approach to the Best Interest Duty conversation,” said Peker. “SuitabilityHub is designed to facilitate a more holistic approach across three key stages. We enable advisers to first shortlist platforms based on those that have the features needed to serve their client. Next, we help them pick products based on what their client values in a platform business, be it financial strength, operational robustness or ESG policies. And finally, we look at the total platform cost to the client’s family, including transaction fees, interest earned on cash and family linking benefits.”

Since its introduction to platform providers and licensees in early 2023, SuitabilityHub has garnered significant traction and is gearing up for a broader launch. “The early reception has been incredibly positive,” Peker comments. “We’re excited to unveil SuitabilityHub to the wider adviser community, ensuring they’re equipped with the insights and tools needed for informed decision-making.”

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