Damien Mu

AIA Australia’s expansion of its Priority Protection insurance range on investment platforms continues, with AIA Vitality available for purchase on PPPI policies from yesterday.

Investors looking to secure life insurance cover will now be able to purchase AIA Vitality on platforms that include Asgard, HUB24, LifeFocus, Personal Choice Private, PowerWrap, Portfolio Care, and netwealth. It will also be available on the IOOF Pursuit platform later this year.

AIA Vitality Is available through financial advisers, and rewards members with points for displaying healthy behaviour, including discounts on shopping, entertainment and travel purchases, and discounts on eligible insurance premiums.

AIA Australia’s Chief Executive Officer, Damien Mu, said the integration of AIA Vitality with PPPI on these platforms will allow more advisers to purchase it through their preferred platform.

“We know that platforms are becoming an increasingly popular business channel for advisers to write risk, so we’ve got to make sure we tailor our products accordingly”, Mr. Mu said. “AIA Vitality has made a huge difference in helping advisers change the conversation around life insurance with their clients and we want to make the program more accessible for them. Platforms will help us do this.”

According to recent statistics from the Investment Trends Planner Risk Report for June 2014, the proportion of risk written on platforms has remained steady over the last 12 months at 38% and is expected to remain steady into 2015. Looking forward, 80% of planners say they intend to use platforms for risk in the next 12 months[1]. Platforms help advisers to streamline their administrative and compliance requirements when writing risk products, and offer a more competitive range of insurance products to complement their client’s investments.

Matt Heine, Executive Director at netwealth Investment Limited, said: “AIA Vitality is unlike any other program in the market at the moment, and we’re confident it will appeal to our advisers and clients. We like the fact that it helps people to improve their health and get rewarded for it, but it also increases their overall engagement with life insurance and superannuation.”

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  Recep Peker

  Planners have greater freedom of platform choice in 2014

• Platform satisfaction is at an eleven year high, but planners’ loyalty should not be taken for granted
• netwealth has the highest satisfaction amongst its users, while MLC MasterKey registered the largest rise in satisfaction
• Westpac holds over a quarter of primary relationships

In its eleventh year, the May 2014 Planner Technology Report is an in-depth study of Australian financial planners and their technology needs. The study is based on a survey of 1,038 financial planners concluded in May 2014. This year’s study highlights a number of interesting trends:

Planners have greater freedom of platform choice in 2014

Planners have greater freedom of platform choice in 2014, with 35% (up from 28%) saying they choose from any provider they wish. Consequently, fewer planners (29%, down from 36%) say the reason they use a particular platform as their primary over another is due to dealer group preference.

“Over the last few years planners’ choice of platform had become more restricted, but following FoFA, and perhaps as a consequence of the introduction of the best interest duty, they now have increasing freedom,” said Investment Trends Senior Analyst Recep Peker. “With a quarter of planners saying they stopped investing new client flows via at least one platform, it’s evident that planners have used this increased freedom to change the mix of platforms they use, focusing even more on the platforms that best address their needs.”

Platform satisfaction is at an eleven year high, but planners’ loyalty should not be taken for granted

Planners’ satisfaction with their most-used platform hit another record in 2014, reaching the highest level recorded in the eleven years of this study’s history.

“Part of this is survivorship bias, with planners more likely to stop writing new business on platforms that they’re less satisfied with,” said Peker. “But an even greater driver is platforms’ increased responsiveness to planners’ needs. Their recent enhancements to usability, adviser support, reporting, direct shares and corporate actions functionality has played a key role in driving satisfaction to new records.”

“Following last year’s record satisfaction, these increases have resulted in planners’ overall satisfaction with their platforms reaching the highest level we’ve seen in the eleven years of this study.”

“Despite platform satisfaction hitting record levels, planners’ loyalty should not be taken for granted,” said Peker. “18% of planners who play some role in platform selection intend to look for a new or additional platform in the next 12 months.”

“When asked which platforms they plan to use, it appears the wraps will be the key winners from this switching, with planners most commonly saying they’re likely to start using Macquarie Wrap, BT Wrap and Asgard eWRAP (including Infinity).”

netwealth has the highest satisfaction amongst its users, while MLC MasterKey registered the largest rise in satisfaction

netwealth continues to lead the platform industry by adviser satisfaction, achieving the highest average satisfaction rating from its users. It was also highest rated for direct equities capability.

The top three platforms by planner satisfaction:

1. netwealth
2. CFS FirstChoice
3. CFS FirstWrap

Over the last 12 months, MLC MasterKey recorded the largest increase in planner satisfaction. When asked what its users saw as the best new feature or innovation, many nominated the new online superannuation and insurance application functionality for helping them save time. The innovative capital and income guarantee feature, and improved reporting functionality also got enthusiastic mentions as best new features.

The second largest increase to satisfaction was achieved by the Asgard eWRAP and Infinity eWRAP platforms, with their users especially happy about the new Fee Disclosure Statement functionality, the availability of BT Life (in addition to AIA), online application enhancements and improved integration with XPLAN.

Westpac holds over a quarter of primary platform relationships

Westpac is the largest platform provider by primary planner relationships, with the proportion using a Westpac platform the most for new inflows remaining steady at 25% as of May 2014 (edging down from 26% last year). Westpac is followed by CBA, which holds 19% of primary relationships (steady).

On an individual platform level, BT Wrap and CFS FirstChoice are still the most-used platforms, followed by North and Asgard Infinity eWRAP, both of which continue to grow their share of primary relationships.

The four largest platforms by number of primary relationships:

1. BT Wrap
2. CFS FirstChoice
3. North
4. Asgard Infinity eWRAP

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Implemented Portfolio and netwealth launch new partnership.

Implemented Portfolios has today announced the launch of their IMA superannuation service in partnership with specialist platform provider, netwealth.

Under the new arrangement Implemented Portfolios will be offering a range of professionally managed portfolios, which utilise their trademark Dynamic Asset Allocation (“DAA”) approach, via their IMA service on netwealth’s Super Accelerator.

Santi Burridge, Managing Director of Implemented Portfolios commented:

“This is a great extension to our current service and one which has been sought after by our adviser network. We are pleased to be partnering with netwealth who can offer such a complementary technology solution to our IMA and which supports our tailored investment process.”

He continued:

“Over the last twelve months we have enhanced our offer significantly and are pleased with the interest and growth momentum we are experiencing from advisers and their clients.”

Executive Director of netwealth, Matt Heine, added;

“The Implemented Portfolio service is unique in the market place and the partnership allows a broader audience and client base to access their investment and implementation capabilities. The interest the combined offer has already generated is exciting and we look forward to developing it even further.”

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In its tenth year, the May 2013 Planner Technology Report is an in-depth study of Australian financial planners and their technology needs. The study is based on a survey of 1,141 financial planners concluded in May 2013.

“At an industry level, planners’ satisfaction with their most-used platform increased for each of the 27 different areas that we measure,” said Investment Trends Senior Analyst Recep Peker. “Following last year’s record satisfaction, these increases have resulted in planners’ overall satisfaction with their platforms reaching the highest level we’ve seen in the ten years of this study.”

While platform providers have made many new enhancements in the last 12 months, the new lower-cost and flexible pricing models have been the most successful in driving planners’ satisfaction.

“netwealth had the largest increase in overall satisfaction, taking the top spot among platforms,” said Peker. “Planners interviewed were especially happy with its new low-cost Super Accelerator solution, with a number also citing international share trading and the availability of multiple insurance providers.”

The top three platforms by planner satisfaction were:

1. netwealth
2. Macquarie Wrap
3. CFS FirstChoice

“We find there’s a strong link between platform satisfaction and switching behaviour, and the most recent trends saw planners’ loyalty to their platforms reach a high point,” said Peker. “Only 19% said they would change any of the platforms they use if it were up to them, compared to a high of 32% saying so as recently as in 2008.”

Usability is the next frontier for platforms to address

As platforms address the gaps in pricing, the landscape of how platforms can help planners has changed.

“Especially for the past few years, the number one improvement planners have asked from platforms was more competitive pricing,” said Peker. “However, with the introduction of lower-cost solutions, planners now want platform providers to help with online usability, for improved business efficiency, better client reporting and review tools, which is mostly FoFA driven, and better adviser support.”

Westpac holds over a quarter of primary platform relationships

Westpac is the largest platform provider by primary planner relationships, with the proportion using a Westpac platform the most for new inflows increasing from 10% ten years ago to 26% as of May 2013. Westpac is followed by CBA which holds 19% of primary relationships, up from 9% in 2004.

On an individual platform level, CFS FirstChoice and BT Wrap are still the most-used platforms, followed by North and Asgard Infinity eWRAP, both of which achieved substantial increases to the number of primary relationships from 2012.

The four largest platforms by number of primary relationships were:

1. CFS FirstChoice
2. BT Wrap
3. North
4. Asgard Infinity eWRAP

Primary and secondary platform relationships now and ten years ago

The platform market has gone through significant consolidation over the last 10 years:

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Kate’s appointment brings the number of netwealth non-executive directors to 3 including Jane Tongs, a former PWC partner who is the netwealth chairman and former Mallesons Stephen Jaques managing partner, Davyd Lewis.

Commenting on the appointment Michael Heine, netwealth Managing Director, said: “I am very pleased that someone of Kate’s experience and industry standing is joining our board. Her strategic insights from senior leadership roles in platforms and funds management, as well as in nancial services law, will be a real advantage for us.”

Ms Mulligan said, “I am very pleased to join the netwealth board. As a diversied nancial services organisation, netwealth provides a very attractive proposition to the market place”.

She added, “In light of pressure from FOFA for all planners to provide impartial advice, I expect netwealth’s position as the leading non-institutional platform to be further enhanced.”

Kate has over eighteen years experience in senior leadership roles in the nancial services industry. She was appointed Managing Director on the boards of Advance and Ventura/All Star Funds Management, where she successfully created a boutique funds manager. She has chaired the Disclosure and Retirement Incomes Committees for the industry body, the (now) Financial Services Council, and is a qualified solicitor. She is also the Managing Director of King Irving Consulting Group, which provides services to the financial services industry.

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