Matt Heine

FinClear, Australia’s leading independent technology and infrastructure provider for financial market access, has announced a new partnership with Netwealth, an ASX 100 company and one of Australia’s fastest growing wealth management businesses, that will enable it to offer individual HIN data and trading to investors and wealth professionals.

FinClear will provide the capability via APIs to the Netwealth platform, augmenting its current reporting and trading solution.

The Netwealth platform currently offers trading via a custodial solution but is looking to provide greater flexibility to its clients with the added option of trading and reporting on their individual holdings, which will be available either via the Netwealth platform or in conjunction with a stockbroker or wealth manager that transacts with FinClear.

The iHIN offering will streamline processes for financial advisors and stockbrokers who have clients with HIN holdings, as they will now be able to execute trades from the Netwealth platform or from their own trading screens in a quicker, more efficient and more secure manner, whilst also being able to access custodial assets, like managed funds, international equities, domestic and foreign bonds or managed account models.

Netwealth’s decision to partner with FinClear was driven by the extensive capabilities of FinClear’s market-leading API broking technology, enabling Netwealth to efficiently and cost effectively integrate with FinClear’s systems.

Commenting on the appointment, Matt Heine, CEO of Netwealth, said: “We’re excited to be adding iHIN administration and reporting for our users, as part of our mission to continuously improve efficiencies, user experiences and customer options as we expand our platform to service greater segments of the Australian wealth management industry including stockbrokers and HNW firms.

“When we set out to bring this additional offering to customers, FinClear was the clear choice of provider. We have tried and tested its proprietary tech, expertise and flexibility, and we knew it would be a straightforward and efficient process.”

David Ferrall, CEO of FinClear, said: “We are proud to continue to grow our role in the wealth space, improving financial markets infrastructure for many Australians. This offering will improve the experience for those using Netwealth’s gold standard services.

“Now end investors on the Netwealth platform have the option to hold assets directly in their own name, and financial advisors or wealth managers will have a far more efficient process for trading, administration and reporting.”

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Nathan Lim

Lonsec Investment Solutions (LIS) has announced the launch of a new and unique investment solution designed exclusively for advisers and their high-net-worth clients.

With private markets showing strong positive trends, LIS has developed a distinct approach that enhances portfolio diversification whilst offering a flexible investment structure via a Managed Discretionary Account, allowing for a high level of portfolio personalisation.

This exclusive investment solution – the LIS Growth Alternatives (LGA) Individually Managed Account (IMA) accesses the recently announced partnership between Netwealth and iCapital to deliver a wholesale IMA focused on Alternatives Assets.

LGA will leverage the administration services of Netwealth’s off-platform reporting to allow a unified view of the client account and provide an annual tax report.

With a minimum entry point of $500,000 into these sophisticated investments, advisers can help high-net-worth clients begin their investment journey into Alternative markets with a foundational portfolio composed of alternative strategies including private equity, hedge funds, real assets, gold and private credit. The portfolio can also be customised at an individual client level.

The solution will allow high-net-worth clients through their advisers, to act with speed in accepting global and domestic opportunistic deal flow through the Netwealth and iCapital partnership. iCapital is a leading global fintech platform providing advisers with unrivalled technology, education and access to alternative assets by removing certain practical frictions often associated with private asset investing process. Access to opportunistic deal flow is granted once an investor’s LGA portfolio reaches $2.5 million.

Nathan Lim, Chief Investment Officer of LIS is excited about launching the new offer saying, “The development of this solution comes off the back of rapidly increasing client demand for portfolios with a high level of personalisation, whilst giving effortless access to the world of alternative assets. LGA provides advisers with an investment vehicle to easily unlock unique opportunities for their high-net-worth clients.”

Matt Heine, CEO and Managing Director of Netwealth, said, “Our partnership with Lonsec Investment Solutions and delivery of the LIS Growth Alternatives IMA is a significant development. We have combined their portfolio management expertise with Netwealth’s diverse range of alternative and private market investment options including our Non-Custodial Asset Administration Service and our exclusive partnership with iCapital. The combination will simplify access and provide greater options to wholesale investors whilst also driving efficiency.”

This new solution follows the recent announcement of the acquisition of Evidentia by Generation Development Group, resulting in the merger of LIS and Implemented Portfolios with Evidentia, to form the newly named entity – Evidentia Group.

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Matt Heine

Netwealth Investments Limited (Netwealth) and Income Asset Management Group Limited (IAM) have partnered to provide financial advisers with direct access to small parcel bonds through the Netwealth investment platform.

Netwealth chief executive officer and managing director, Matt Heine, said the partnership is a result of the increasing demand from Netwealth clients for bond products, particularly given the higher interest rate environment.

“The partnership with IAM signifies an expansion of our offering to include a diverse range of bonds, and furthers our commitment to better support clients by broadening the fixed income investment options available.

“By opening up access to bonds, we’re enabling more Australians to diversify their portfolios in a way that was previously restricted to large institutional investors.

“IAM’s ability to offer access to a wide array of bonds, including investment grade, high yield, domestic, and international bonds complements our existing services. The partnership expands our platform’s appeal by providing a complete, integrated solution for fixed income investments,” he said.

In Australia, bonds have typically been available to wholesale investors for purchase in large parcel sizes ($500,000 and over), however under the arrangement with Netwealth, IAM will provide investors with access to smaller bond parcels, starting at $50,000.

IAM chief executive, Jon Lechte, said this improved level of accessibility means advisers and their clients can benefit from the investment opportunities in the domestic corporate bond market.

“Corporate bonds play an important role in the strategic asset allocation of client portfolios as the middle ground of investments, with investment grade credit typically displaying much lower volatility compared with equities, and a greater level of income than cash and term deposits.

“Our partnership with Netwealth means advisers can build portfolios of direct bonds through the Netwealth platform, negating the need to manage investments across multiple platforms. It also streamlines reporting, with is available directly from the platform.

“With higher interest rates, yields on Australian corporate bonds have also adjusted and are now providing investors with attractive yields. This has seen interest from advisers increase, and now we’re able to offer more than 300 bonds via the Netwealth platform. This is a really positive development for the local adviser market,” he said.

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Mandy Mannix

Challenger has announced its fixed term annuities are now available within the Netwealth Platform, simplifying and broadening access to income solutions for advised customers.

Making fixed term annuities available within the Netwealth Platform delivers greater efficiency for advisers and their clients, removing the need to quote or complete a separate application form, and is fully integrated for Netwealth client reporting.

Annuities are available for terms of up to five years across Netwealth’s investment, super and pension platforms. This allows customers to invest both superannuation savings and non-superannuation money without leaving the platform.

Mandy Mannix, Challenger’s Chief Executive, Customer said: “Fixed term annuities are a really attractive option for anyone seeking to help maximise returns on their holdings, and of course for those simply looking for certainty of regular income,” Ms Mannix said.

“We are constantly looking to improve the efficiencies for advisors using our products and our partnership with Netwealth does just that, by providing advisers and their clients easy access to fixed term annuities with all the efficiencies that come with investing in a platform.

“Investors seeking secure income are increasingly recognising the benefits of fixed term annuities, which are currently offering the most attractive rates we have seen in a decade, often at a premium to major bank term deposits.

“Providing Challenger fixed term annuities in platform expands access to a broader range of customers, enabling advisers to integrate term annuities into portfolios to deliver better retirement outcomes for their clients.”

Matt Heine, Netwealth CEO and Managing Director, said the launch of an in platform annuity solution allows advisers easy access to fixed term annuities in the same way they would invest in any other fund or product.

“Our partnership with Challenger is another example of Netwealth leading the market in offering the most comprehensive suite of products for advisers and their clients” Mr Heine said.

“In the current environment investors are looking for ways to protect their portfolio from market volatility and address the persistent high inflation environment we are facing. This partnership provides greater access to an alternative to term deposits with attractive rates.”

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Pat Garrett

A new white paper (Is it red tape or is it me? Deniers, devotees, and the digital advice revolution) commissioned by online investment manager Six Park has revealed that COVID-19 has increased the pressing need for affordable and accessible financial advice in Australia, but the need can’t be effectively met until perceived red tape is cast aside.

The increasing and changing demand for advice is driven by a range of factors including the royal commission, the diminishing number of financial advisers, changing client demographics and, most recently, the impacts of COVID-19.

The pandemic, subsequent economic downturn and looming opportunities during the recovery phase mean that more Australians need advice than ever before, says Six Park co-CEO Pat Garrett.

“The white paper reinforces that there simply aren’t enough advisers in Australia to meet the current and future anticipated demand for advice,” said Garrett.

“Meanwhile, the pandemic has triggered an increased interest in investing amongst Australians and the lockdown has made digital interaction and service provision the new norm. All of these elements are combining to provide the final push for the industry to transform in a way that meets today’s client needs.”

Who the client is and what sort of advice they need was also a topic explored in the white paper by contributors including Investment Trends Research Director Recep III Peker, Netwealth CEO Matt Heine and FPA Head of Policy, Strategy and Innovation Ben Marshan, with agreement that the definition is changing – and fast.

“The increase in the number of Australians needing financial guidance, the rise in millennial and female investors and the immense generational wealth transfer we’re about to see means the nature and needs of the broad consumer market are becoming much more diverse. This is the opportunity for those advisers ready for this transformation,” said Garrett.

“Many of these Australians don’t have huge budgets for advice, they have no desire for full-scale service, and they don’t want to engage with advisers in the same way their parents did – so ‘best fit’ advice is not what it used to be.

“Anything that allows advisers to better engage with these Australians today is a very attractive proposition and that’s where digital solutions come in. Today’s digital advice client could be tomorrow’s wholesale investor.”

The white paper explores a number of myths and perceived ‘red tape’ that is hindering some in the industry when it comes to embracing digital, scaled advice. These includes the misguided belief that this type of advice is not compliant with best interest duties, that ASIC doesn’t approve and that digital solutions like robo advice are competing with traditional financial advisers.

“There is no competition there – in fact, when a human element is added to a service like robo- or digital- advice, the conversion rate of customers who actually implement the advice drastically increases – and the paper provides insights from Australian financial planners who are already in the process of successfully transforming their offering and broadening their appeal with digital solution partners.

“It’s both an exciting and challenging time for the industry. There is a lot for advisers to work through – there is no denying that – but there is certainly no red tape that’s blocking their way and some aspects of going digital could actually be much easier than first perceived.

“We all need to work together to create the vibrant, successful and sustainable wealth management industry – to benefit clients and advisers alike, now and into the future.  That’s the driver behind this paper – to generate discussion, collaboration and contribute to the knowledge bank around the digital transformation of wealth management in Australia.”

Commenting on the Financial Services Council’s Future of Advice Report, released earlier this week, Mr Garrett said the report provided some interesting proposals, specifically around recognising more explicitly that consumers’ needs vary in scope and complexity.

“While there is still room for policy improvement in Australia’s financial advice landscape, regulators have already recognised that there are differences in consumers’ advice needs. Their response has been to reiterate that scaled and digital advice should play a prominent role in providing services for the simpler needs of the mass market. Scaled advice services already have regulatory guidelines supported by ASIC and the federal government, and the good news is that scaled advice is working right now. There is no need for advisers to wait for the kinds of changes the FSC is advocating to take a step towards the future of advice.”

Download the whitepaper.

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Matt Heine

Milliman, Inc. a global consulting and actuarial firm, has formed a strategic alliance with Netwealth, Australia’s largest non-institutional platform provider, in a significant move which aims to widen the distribution and availability to Australians, of its first range of managed account portfolios with in-built protection, to dampen the effects of market volatility and potential for capital losses.

Launched in March the Milliman SmartShield series is the first managed account offering from the global business, which advises, hedges and consults across $240 billion in assets. “We’re extremely pleased to be able to work with Netwealth on the distribution of our new SmartShield Managed Account solutions. As one of the fastest growing and most innovative platforms in Australia, this relationship will enable us to build upon the current interest from advisers and will significantly widen the availability of SmartShield for many advised Australians.” Milliman’s Australian Practice Leader, Wade Matterson said.

“When we designed SmartShield we could never have foreseen that its launch would also coincide with the global onset of the Covid-19 pandemic.”

“Financial advisers were already facing a raft of challenges, as the industry undergoes significant adjustments and regulatory requirements such as the Best Interest Duty were resulting in a greater focus on the fees and benefits of investment solutions for clients.”

“The built-in risk protection dampens volatility and capital losses in a market downturn and importantly, can be switched on or off as required by advisers.”

“SmartShield has armed advisers with an investment solution for their clients at an important time. It is simple and affordable, fits within their existing processes and provides a level of certainty for investors”.

Matt Heine, Joint Managing Director, Netwealth said: “We are pleased to be working with Milliman and now offer their unique investment solution via our managed account to investors on both our cost-effective Core menu in addition to our broader investment menu. The new offer consists of four portfolios ranging from Moderate to High Growth with each portfolio designed to meet the needs and risk profiles of investors who are increasingly seeking greater investment certainty and predictability.”

Milliman has been working with institutions and applying risk management strategies on a global scale for decades, helping many to navigate challenging market situations such as the Global Financial Crisis where it is estimated its strategies saved $40B USD for their clients.

According to the data from IMAP (The Institute of Managed Account Professionals Ltd) Managed accounts grew by $7.9 billion for the last 6 months of 2019, boosting total sector assets to $79.29 billion.

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Matt Heine

Lonsec has seen significant growth in its Managed Accounts offering over the last 12 months, as financial advisers increasingly seek an efficient way to implement professionally managed portfolios.

This growth is set to be given a further boost with Lonsec’s Managed Account solutions to be made available via the Netwealth platform.

As managed accounts gain an increasing share of advisers’ allocations, Lonsec has sought to widen it’s service offering to accommodate this rapidly growing area.

“We are very pleased to offer Lonsec’s suite of multi-asset and retirement focused managed portfolios on Netwealth. We believe the breadth and depth of our research positions us uniquely in the marketplace to deliver exceptional outcomes for advisers and their clients,” said Lukasz de Pourbaix, Executive Director, Lonsec Investment Solutions.

Netwealth Joint Managing Director, Matt Heine said, ”Our partnership with Lonsec further increases the wide range of options available on our platform, and allows our growing adviser network and their clients access to one of Australia’s leading investment managers”.

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Matt Heine

Industry-leading investment and superannuation platform provider Netwealth (ASX: NWL) has added the Franklin Concentrated Global Equity Ex-Australia portfolio, a Separately Managed Account (SMA), to its Managed Account Service.

Under the arrangement, Franklin Templeton will select a concentrated portfolio of typically around 20 international stocks, and investors can own the underlying stocks in the strategy by investing via the managed account. The Franklin Templeton global equities managed account portfolio is a long-only, high conviction portfolio with the ability to invest in companies across the market capitalisation spectrum and employs fundamental bottom-up stock analysis to identify and select quality growth companies.

Matthew Harrison, Managing Director, Franklin Templeton Investments Australia, said, “Australian investors have a growing desire to invest internationally, and demand for high performing, global and mid-cap equity strategies continues to grow. We are excited to have the Franklin Global Equity managed account portfolio added to Netwealth, offering investors the opportunity to tap into some of the world’s most forward-thinking companies.”

“The portfolio includes businesses that have solid growth prospects, strong management teams, and a sustainable competitive advantage. It includes well-known companies such as VISA and Salesforce, but also mid-sized companies believed to offer not only solid growth prospects and well-established competitive advantages, but also meet the investment team’s strict quality and valuation metrics.”

Netwealth Managing Director Matt Heine said: The strategy allows Australian investors to invest in global companies selected by experienced international fund manager Franklin Templeton, with the ability to directly own and include these companies in their portfolio. Franklin Templeton has a strong track record of managing international investments, and we are excited to collaborate in providing a new and compelling offering to Australian investors.”

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Richard Dunkerley

Financial advisers have an opportunity to elevate their services into that of ‘financial coach,’ making themselves as relevant to their clients as other lifestyle professionals, according to a new whitepaper by Zurich Life & Investments.

BusinessFIT: Navigating toward the advice practice of tomorrow, launched yesterday, is based on findings of a workshop which included some of the industry’s most progressive and successful thought-leaders. It considers the fundamental characteristics of prosperous advice practices over the medium-long term, to 2020 and 2025. This is in the face of changing consumer demographics and demands, increasing industry regulation and advancing technologies.

The four main recommendations are:

1. Advisers need to consider how to shift their service from one of ‘technical specialist’ to one of financial lifestyle coach, relating money and wealth goals to their clients’ lifestyle aspirations, objectives and passions. This becomes particularly important as the values of target audiences change, appreciating experiences as well as things, for example. This trend is becoming more common in Millennials who are being forced to rethink home-ownership as the great Australian dream, and Baby-Boomers who are looking to enjoy their retirement with greater health, hobbies and travel.
2. Advisers need powerful back office technologies to support increasing regulatory demands. Ever-increasing regulatory requirements and greater demands for transparency means that successful advice practices will have no choice but to invest in technologies that can automate reporting. Those practices can install the right technologies – within their businesses and through their dealer groups – to efficiently support these administrative requirements, will also be able to dedicate more focus to client consultations and outcomes.
3. Clients will still demand the ‘human touch,’ but emerging automated technologies can play an important technical role. Artificial intelligence and robo-advice, amongst other emerging technologies, may be able to model portfolios much more quickly than an individual financial adviser, and so they have the potential to play an important role. This will not, however, supersede the human relationship between financial coach and client – the building of trust and relationship, emotional intelligence and the translation of lifestyle aspirations into monetary and wealth goals.
4. Consider scalable digital solutions to keep in touch with ‘roaming’ clients, facilitating ongoing communication from wherever they are located. Beyond the ‘human touch’ of a face-to-face appointment, this involves having tools that clients can engage with whilst they are on the go. This might include an app that provides real-time updates on their portfolios, but also let’s them scenario plan, seeing the potential impact should they save or invest more money each month, or change their investment ratios or strategy. By private-labelling basic financial apps, advisers can give clients the opportunity to be as hands-on or hands-off with their money as they please, while still having the trust and personal guidance of a professional financial lifestyle coach to build a wealth strategy in line with their life aspirations.

Zurich’s BusinessFIT whitepaper was developed with the input of workshop participants including Jessica Brady from BT Financial Group, David Clark from Koda Capital, Tim Deamer from Crosbie Wealth, Peita Diamantidis from Caboodle Financial Services, Matt Heine from NetWealth, and Adrian Patty from AP Financial Services, along with futurist Anders Sörman-Nilsson.

In summing up one of the main recommendations, Peita Diamantidis, said, “Our industry can be under a misnomer that money is the point for clients, when it’s not; lifestyle is. There is a great opportunity to change the way we’re approaching financial planning to relate it in terms of dreams, hopes, motivation, inspiration.”

Tim Deamer, Director, Crosbie Wealth Management said, “Clients want to be excited about their financial futures. The sale of a product is irrelevant to them. Having tools that they can engage with are important, so when they interact with their adviser, they feel as though they are being supported on their journey.”

This research is the latest in a series sponsored by Zurich which is dedicated to supporting the continued success of the financial advice industry in Australia.

Richard Dunkerley, Head of Marketing and Communications at Zurich Life & Investments, said, “In the face of increasing regulation and ongoing pressure on the advice industry, we wanted to bring together some of the industry’s best minds to consider what opportunities there were for advisers servicing some clients through their retirement, but also engaging the next generation – the lucrative but relatively un-tapped Millennial market.

“What became clear – in considering changing lifestyles and demographics – was that people still value money and wealth, but as an enabler to reaching other goals, and this provides an opportunity for advisers. The role of technology is also crucial – both for reducing the administrative burden of reporting and regulation, but also to service clients in between appointments, and from wherever they may be based.

“Harnessing evolving technology, and speaking to clients in values-based terms, offer exciting opportunity, according to our think tank of thought-leaders,” he said.

Download a full copy of the research – BusinessFIT: Navigating toward the advice practice of tomorrow

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Kendall Flutey

Key points:

• Netwealth in partnership with a NZ tech company, is bringing a financial literacy program to Australia targeting 15,000 kids nationally over the next 12 months.
• Known as Banqer, the program aligns with Netwealth’s desire to inspire Australians to see wealth differently and to discover a brighter future.
  Banqer is a virtual classroom economy created where kids can learn to earn, save, spend and invest their money in a safe and engaging way.
• Netwealth is the proud supporter of a ground breaking financial literacy program which over the next 12 months will be released nationally across Australia to an estimated 15,000 students, fully funded, forever changing the financial futures of these young Australians.

A breakthrough in financial literacy in Australia, the program known as Banqer, teaches kids about money and financial concepts, giving them the chance to learn about money in a safe, engaging and fun way.

According to Netwealth Joint Managing Director, Matt Heine, supporting the program is an excellent way for Netwealth to extend its wealth philosophy to Australian kids.

“Netwealth was created to provide investors and wealth professionals with a better way to invest, protect and manage their current and future wealth,” he said. “We seek to enable, educate and inspire people to see wealth differently and to discover a brighter future. Banqer is a great opportunity for us to extend this purpose supporting a program that starts kids on this journey.”

More than 30,000 students from 450 schools in New Zealand currently use Banqer, as well as a handful of teachers in the United Kingdom, United States, Canada and South Africa. Banqer is currently being used by 28 schools in Australia, with plans to take it to the US this year.

“We all want a brighter future for our kids, and that means making sure programs like Banqer get into our schools so kids can learn in a practical way, life-long concepts about money,” said Heine. “We are very proud to have brought this program to Australian kids.”

Launched in New Zealand in 2015 and the brainchild of accountant turned developer and Banqer CEO Miss Kendall Flutey, kids can influence their financial environment by doing classroom jobs to earn cash or offering services to other children. Any virtual money that they earn from rewards for good behaviour or classroom jobs, they can choose to save, spend or invest in houses in a virtual real estate market.

Teachers can use the program’s reward system to help motivate kids, encouraging development and confidence. Kids learn valuable life skills by managing the rental of their desks and paying for class privileges. Teachers can also trigger virtual earthquakes or sudden interest rate rises to emphasise the benefits of insurance and to demonstrate the importance of savings relative to debt.

“Banqer helps kids get curious, creative, and ultimately, confident with money,” said Flutey. “It has been embraced by kids and teachers, but is also transcending geographical borders as we all start to understand financial literacy is a global challenge.”

Attending the launch event in Sydney, the Chairman of the Australian Government’s Financial Literacy Board, Mr Paul Clitheroe said the obvious starting point for financial literacy was with kids. “You have to start early with good habits in life, and money is no different,” he said. “To get the full benefits of strategies such as compounding, it is about the long-term and that means getting started young.”

Kids in Year 1 to Year 5 learn money management and personal finance topics such as income, savings and interest while Years 6 and 7 learn about topics such as mortgages, rent, paying tax, paying excesses on insurance claims.

The recent Young Australian Survey by Roy Morgan Research which surveyed more than 2,500 Australian kids aged 6-13 years found 76% of them saved money. Of this group who did save money, the highest proportion (25%) had saved between $1-$49. Meanwhile, most kids surveyed spend their money on toys (44.7%), with a close second saving it in a bank (43.6%). Buying snacks and drinks came in at number three at 29.3%.

“All kids deserve a great start to life and being financially literate, being confident and curious, is a huge step towards this goal,” said Heine. “We are very excited by the future we are working with Banqer to create.”

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