Alex Vynokur

In a significant development for Australia’s financial advice landscape, Betashares has announced that it will merge its managed accounts division with InvestSense, forming a new business called Trellia Wealth Partners.

Upon completion of the merger, Trellia Wealth Partners will offer one of the most comprehensive managed account solutions in the Australian market, encompassing actively managed and index-based portfolios, as well as fully bespoke investment portfolio design and implementation support.

With approx. $8 billion in funds under management and a strong growth trajectory, Trellia Wealth Partners will operate as a standalone business, backed by the strength and scale of the Betashares Financial Group.

A stronger, more comprehensive partner for advisers

Trellia Wealth Partners brings a powerful and diverse set of capabilities designed to support and empower advisers to deliver lasting value for their clients.

Trellia Wealth Partners will deliver a leading range of investment solutions across Betashares’ low cost, index-based model portfolios, InvestSense’s actively managed flagship portfolios, as well as fully bespoke portfolio solutions.

Trellia Wealth Partners will provide comprehensive business support services to enable advice firms to accelerate their growth strategies.

Going beyond traditional practice management, Trellia Wealth Partners will also provide technology and tools to enhance business efficiency and empower advice firms to deliver a greater client experience. In addition, clients will have access to business strategy consulting, organic growth and acquisition support, as well as best in class portfolio insights, reporting, client engagement content and commentary, which financial advisers can leverage to deliver better outcomes for their clients.

InvestSense Directors Jonathan Tolub, Jonathan Ramsay, Fil Andronaco and Paul Carrington will serve as Partners and have all made a long-term commitment to the business.

Backed by aligned philosophies and a shared purpose

The partnership underlying Trellia Wealth Partners is founded on a shared vision of the key trends reshaping the financial services industry and an unwavering conviction in the positive outlook for Australia’s financial adviser community.

Many of these powerful trends are not just confined to Australia but are playing out globally. These themes include the structural demand for financial advice, the power of managed accounts for both advisers and their clients, the rise of ETFs, the significant growth of private market opportunities, as well as the shift from accumulation to pension phase for the superannuation sector.

Betashares Founder and Chief Executive Officer, Mr Alex Vynokur, said the backdrop for Australia’s financial advice community is very conducive to growth over the coming years, as more people seek advice to make better financial decisions.

“In this climate, Trellia Wealth Partners represents a purpose-built offering that enables financial advisers to leverage innovation, scale, and international best practice to deliver more value to their clients, and assist their practices to grow into the future. We will build on the pedigree, experience and track record in service of Australia’s financial advisers and their clients,” Mr Vynokur said.

Continuity and additional capability

Trellia Wealth Partners will maintain full investment independence, continuing to apply the proven investment philosophies and processes that clients are accustomed to. To that end, there will be no change to the management or service of existing client portfolios unless enhancements with demonstrable adviser or investor benefits are available or appropriate.

“We are building on the strong foundation we have laid over the past decade,” said Jonathan Tolub, incoming Partner at Trellia Wealth Partners.

“Our flagship and custom-built portfolio solutions have helped advice practices grow for over a decade. Now, we are combining that agility with the scale, support, and world class infrastructure needed to deliver even more value to our clients,” Mr Tolub said.

“From the beginning, it was clear that this partnership was more than complementary – it was aligned in purpose. We bring different strengths, but we share a belief in building client-centric, advice-aligned solutions,” Mr Tolub continued.

“Trellia Wealth Partners allows us to provide advisers the advantage of leading investment solutions, best in class support capabilities and depth in expertise, to assist our clients in their growth journeys,” Mr Tolub concluded.

Trellia Wealth Partners will bring the client, operations and advice solutions teams together for a seamless client experience, whilst the investment teams will retain their independence, integrity and continuity for clients.

A growing market and a growing need for scale and service

Managed accounts are currently one of the fastest-growing areas in Australian financial services. According to the Institute of Managed Account Professionals (IMAP), the sector reached $232.77 billion in assets as of 31 December 2024 – a nearly 50% increase from the previous year.

Trellia Wealth Partners expects the strong rate of growth in the managed accounts industry to continue over the next decade and beyond.

A reflection of Betashares’ commitment to serve the needs of Australian financial advisers

The launch of Trellia Wealth Partners reflects Betashares’ ongoing commitment to supporting the financial advice profession with innovative, cost-effective, market leading solutions.

Betashares recently reached $50 billion in assets following a period of strong organic growth. It also follows last year’s strategic investment from Temasek, a global investment company headquartered in Singapore, which is aligned with Betashares’ long-term strategy of continuing to build a diversified financial services business, with a strong focus on delivering transparent, cost-effective investment products, portfolio solutions, services, technologies and financial education.

Betashares’ Mr Alex Vynokur continued by saying that joining forces with InvestSense to transform the managed accounts landscape will help accelerate work toward the broader goal of helping Australians build long term wealth.

“For nearly 15 years, we have partnered with Australia’s financial advisers through the provision of a range of high-quality products and services, including ETFs, managed accounts and additional services such as business support. We consistently strive to be a trusted partner for Australian financial advisers, aiming to deliver not only investment excellence but also support to our clients in growing their businesses, achieve business efficiencies and deliver exceptional outcomes for their clients.   Today’s announcement is a reflection of our commitment toward this goal.

“Financial advisers play an integral role in helping many Australians progress toward their financial goals. Trellia Wealth Partners brings together our unique strengths and a shared purpose – to support advisers through innovation, partnership, and best-in-class investment thinking. This is not just about combining capability, it’s about accelerating our impact,” Mr Vynokur concluded.

The transaction facilitating creation of Trellia Wealth Partners is expected to complete in Q3 2025.

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Fil Andronaco

Jonathan Ramsay, Jonathan Tolub and Fil Andronaco have announced that their new business InvestSense has commenced business from premises located in the Sydney CBD.

Commenting on the aspirations of the newest entry into the Australian financial services marketplace, spokesperson Jonathan Ramsay said the cornerstone of the business is to assist advisers to help their clients better understand their investment situation.

“Unfortunately, the financial services industry often has a tendency to either blind its constituency with science or oversimplify with unrealistic promises, and sometimes does both at the same time.  We want to strike a balance  – as Einstein reputedly said ‘to make things as simple as possible but no simpler’.  To do this we have a valuation driven approach that integrates everything from asset allocation to manager selection and which is relatively easy to communicate to the end client”.

“It is also clear that the industry has picked up a fair amount of clutter over the years and that the perceived ‘best practice’ in portfolio construction, compliance and advice doesn’t always make things easy for advisers or their clients. We think there is a lot you can do to remedy that situation with the technology that is now widely available and a clean sheet of paper”.

To those ends the InvestSense team will work diligently to make life easier for advisers and their clients by combining contemporary platform technology with a coherent investment process and approach to communication.

Jonathan Ramsay continued, “We can assist dealer groups and their advisers to re-engineer their advice processes and investment offerings in a way that better suits consumer needs”.

InvestSense also believes it can improve investment outcomes with a relatively simple process that has stood the test of time and allows clients to –

• Provide an informed view of prospective returns from different asset classes, funds and securities

• Increase transparency using managed accounts that help investors to help themselves

• Implement models in a way that facilitates a more agile investment process

• Communicate portfolio positioning better

• Ultimately help their clients make better long term decisions based on a common understanding of their needs and portfolio objectives

Jonathan Ramsay concluded, “We are excited about the future and prospects for success and are very confident that the InvestSense business model and marketplace offering will resonate and be very attractive to dealer groups and advisers servicing the needs of high net worth individuals”.

“We are talking to a number of dealer groups and I expect to announce our first major dealer group client signing in the coming weeks”.

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New global themes and trends, usually relayed and reinforced by the 24-hour news cycle, have a funny way of overpowering fundamental analysis of markets and economies. My favourite example in 2013 was failed electronics retailer Tweeter, which saw its share price soar by over 1000% when investors caught up in the hysteria over the Twitter IPO mistook its stock code—TWTRQ—for Twitter’s (TWTR). Investors bought 14 million Tweeter shares in a single day.

Granted, this is an extreme example, but in some ways we are all guilty of focusing too much on the investment theme du jour. While these themes can have enormous power to move markets, they often obscure the fundamental story that investors should be focusing on. Below are what I consider to be the most overused and abused phrases and concepts of 2013 (with their prevalence in Google search results) and what we should have focused on instead (it may not be too late!).

Chart 1: Google search results (Source: Google)

“Whatever it takes”

Just three words uttered by European Central Bank President Mario Draghi in July 2012 but which heavily influenced market sentiment well into 2013. Implied by this phrase was an assurance that the Eurozone would not let one of its members fall down. The backstop proved solid as the Cyprus crisis that erupted in March 2013 didn’t cause nearly as much disruption to world markets as its PIIGS predecessors did in 2010, 2011, and 2012. However, Mr Draghi was conveniently long on promises and short on details. Saving the Euro could realistically only be done if the Eurozone transforms itself from a monetary union to a fiscal one. Getting all 17 members to agree to this (especially Germany) is tricky at best, and while an agreement on fiscal union was signed, it has yet to be carried out. Instead of focusing on Draghi’s promise, investors should monitor the implementation of actual reforms (or lack thereof).

“The great rotation”

Refers to the supposedly “secular” change in asset allocation that will see investors abandoning their low yielding fixed interest securities in favour of equities. As is often the case though, most of the rotation had already occurred by the time the media took hold of the story, since sovereign bonds have been overvalued relative to equities for the last two to three years. The Australian version of the “great rotation” that is seeing investors leaving their term deposits in favour of local equities is perhaps a notable exception, as the process is still very much in progress. Overall, there is nothing secular about the change and nothing “great” about the rotation. The yield of the US 10-year Treasury bond has gone up in 2013 and will most likely continue to do so in 2014, as the Federal Reserve slowly withdraws quantitative easing. As bonds become more attractive again, investors will inevitably switch back.

“Search for yield”

A sub-theme of the great rotation, it pertains to investors for whom yield (rather than capital growth) is a primary investment objective, such as retirees. For them, abandoning fixed income investments is only half the equation and an appropriate income stream must be found elsewhere. The solution they opted for en-masse were shares with high dividend yields. This phenomenon has been powerful enough that it created a market distortion nick-named…

“Expensive-defensives”

Defensive, high yielding stocks are traditionally perceived to be more defensive than high growth stocks, and usually priced more conservatively. That is, they tend to lag in market rallies. However, these stocks have undoubtedly led the S&P/ASX 200 Index in 2012 and 2103, earning them the “expensive” label. Indeed, according to most measures of valuation, the likes of Telstra and the four major Australian banks appear expensive at current levels, which means they are likely to lose more than the overall market in a future downturn. So while certainly expensive, they have probably lost their defensiveness. This could be the exception to our rule, because despite extensive use of this term in the media, investors don’t seem to have altered their behaviour. Quite the contrary, some companies have picked up on the trade and are issuing debt in order to pay for dividends, knowing it will increase their share price. The concept of dividend growth sustainability doesn’t seem to have penetrated investors’ consciousness just yet.

“Fracking and shale gas”

Infrastructure investments have been the other main beneficiaries of the “search for yield”. The sales and marketing departments of investment banks have come up with the perfect cover story to sell them: technological advancement leading to productivity gains. Everything started with a supposedly innovative drilling technique called hydraulic fracturing (shortened to “fracking”) that allows gas and petroleum to be extracted from previously hard to reach bedrocks. But fracking was actually first tested in 1947 and the (very real) shale gas boom in the US owes its success to many other factors as well, including high oil prices and pre-existing pipeline networks. While fracking will, in all likelihood, continue to expand, it is fair to assume that the remaining upside in all related investment opportunities is limited. That should include the Australian “gas boom”.  Furthermore, no one has yet been able to explain why, despite the abundant new supply of natural gas, the price of oil has remained near historical highs. The answer to this question is probably the key to successful future investments in energy. Supply and demand anyone?

“Abenomics”

The term used to describe the economic policies of Japanese Prime Minister Shinzo Abe, whose PR team also deserves special mention for having come up with the “three arrows” concept: fiscal stimulus (also known as government borrowing more to spend more),  monetary stimulus (quantitative easing) and structural reforms.  The Japanese Nikkei 225 Index has risen 46.5% YTD on the back of the first two arrows being implemented and the promise that the third one is imminent. With Japan’s debt-to-GDP ratio at 230%, the first arrow can only be pursued with the help of the second, that is, if the central bank buys every bond issued by the government. The central bank is expanding its balance sheet to previously unthinkable levels and Mr Abe appears to have convinced international investors that this can be done ad-infinitum. The sceptics among us believe that at a certain (as yet unquantifiable) point, the sheer size of the central bank’s balance sheet as a percentage of GDP could cause investors to lose confidence and devalue the yen by much more than Abe is targeting, plunging the country in a more severe recession. Only structural reforms can help save Japan, and they are not yet being implemented.

“Septaper” 

The tapering of the US Fed’s quantitative easing measures was set to happen in September, but didn’t. From April on, members of its policy setting body the Federal Open Market Committee started to put out “feelers”, implying that the Fed may reduce the amount of Treasuries it was buying every month (currently still at $US85 billion). The markets took those indications very seriously and long-term bond yields started to rise as a consequence. While the Fed seemed satisfied enough with the slow pace of economic recovery to begin to taper, it deemed the recovery too fragile yet to sustain higher yields and delayed the decision. One cannot blame the financial press for focusing so much attention on an event that is indeed a turning point in the post-GFC recovery, one that we’ve been awaiting for five years. It is, however, regrettable that the adverse side effects and unintended consequences of quantitative easing have gone largely unnoticed. For one, the liquidity provided by the Fed has led to new records in corporate debt issuance, which companies have used to issue higher dividends and buy back more shares, inflating their share prices. Another notable side effect has been the lack of availability of US Treasuries (because the Fed holds so many), which are needed as collateral for many lending transactions. As a result, borrowing has been somewhat restricted, even though QE was originally designed to boost borrowing.

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By Jonathan Tolub, senior asset consultant, van Eyk Research 

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