Peker Recep

In its ninth year, the 2015 Margin Lending Broker Report is an in-depth study of Australian full service stockbrokers’ attitudes and behaviours towards margin lending. The study is based on a survey of 234 full service stockbrokers concluded in December 2015.

Key findings of the Investment Trends 2015 Margin Lending Broker Report:

• Brokers are the fastest growing margin lending channel and have nearly overtaken financial planners by total level of outstanding margin debt
• Clients are driving more of the margin loans that are organised by brokers
• Leveraged continues to lead the industry by number of relationships and overall satisfaction

Brokers are the fastest growing margin lending channel and have nearly overtaken financial planners by total level of outstanding margin debt

As reported by the Reserve Bank of Australia (RBA), the margin lending market continues to recover from its 2012 lows and stands at $12.1 billion as of December 2015. Full service stockbrokers are gaining a greater share of this market and now constitute 28% of all outstanding margin debt, up from 22% in 2011.

Outstanding margin debt in the broker channel increased 7% over the year to December 2015 to $3.45bn. Over the same period, margin debt held by financial planners grew just 1% to $3.47bn and the direct channel grew by 1% to $5.19bn.

“The margin lending industry has rebalanced since the GFC,” said Recep Peker, Head of Research for Wealth Management at Investment Trends. “The majority of margin loans are now procured directly by investors, while the financial planner and stockbroker channels have reached parity in terms of outstanding debt.”

“The profile of investors in each channel is quite different, with stockbrokers typically servicing the wealthier end of the client spectrum.”

Clients are driving more of the margin loans that are organised by brokers

Investors are playing an even greater role in driving stockbrokers’ margin loan recommendations. Significantly more stockbrokers than last year (73%, up from 52%) say the most recent margin loan they wrote was instigated by their client.

“Full service stockbrokers have the opportunity to be proactive by expanding the margin lending conversation to more of their clients,” said Peker. “Our research shows investors are becoming increasingly sophisticated in their approach to margin lending, including recognising the diversification and tax benefits, and seeing it as part of a broader portfolio strategy.”

“Stockbrokers could take advantage of this increased client understanding by incorporating gearing into their clients’ holistic strategy.”

Leveraged continues to lead the industry by number of relationships and overall satisfaction

Stockbrokers’ satisfaction with their main margin lender increased from last year’s levels. They are giving margin lenders higher ratings across most key areas, notably speed of application process, integration with their main platform, and reliability and accuracy of reporting.

Leveraged has solidified its lead in overall broker satisfaction with margin lenders following last year’s rebrand, the relaunch of their website and their continued focus on service.

In terms of market share, Leveraged continues to hold the majority of primary relationships with stockbrokers (55%), followed by St George Margin Lending (9%) and ANZ Investment Lending (8%).

The post Brokers are the fastest growing margin lending channel: Investment Trends 2015 Margin Lending Broker Report appeared first on AdviserVoice.

Peker Recep

Key findings of the Investment Trends 2015 Retirement Planner Report:

• Financial planners are becoming even more sophisticated in their product advice to retirees
• Challenger is growing the annuities market by making the product easy to understand and use
• CFS FirstChoice was the highest rated platform for pre-retiree/retiree capabilities overall
• Planners seek the next generation of retirement modelling tools and calculators

In its fifth year, the 2015 Retirement Planner Report is a comprehensive study of Australian financial planners and their advice to retirees and pre-retirees. The study is based on a survey of 591 financial planners concluded in October 2015. This year’s study highlights a number of interesting trends:

Financial planners are becoming even more sophisticated in their product advice to retirees

Suppressed cash rates and heightened market volatility are driving financial planners to seek new solutions for their retiree clients. Over the past 12 months, financial planners placed only 16% of their new retiree client flows into cash and term deposits, down from 22% in our last study.

“To continue being seen as adding value to their pre-retiree and retiree clients, especially in this high volatility and low interest rate environment, financial planners are reducing their flows into safe haven investments such as cash and term deposits in favour of more sophisticated products,” said Recep Peker, Investment Trends Head of Research for Wealth Management. “Annuities, diversified funds and income funds will continue to be the winners as planners seek higher yielding, diversified investments”.

Relative to their current usage, two products stand out for future growth potential among the older client segments: Annuities and goals/outcomes-based funds.

Challenger is growing the annuities market by making the product easy to understand and use

The number of planners who advise on annuities continues to grow. 41% say they recommended annuities in the 12 months to December 2015, up from 38% in 2014 and 32% in 2013. Annuities’ rise in popularity is due in no small part to Challenger’s efforts in raising awareness and education of the product.

“Planners are becoming proficient in recommending annuities, with more finding them easy to understand and use,” said Peker. “Those who explain annuities to clients typically spend only 14 minutes doing so, versus 17 minutes taken to explain managed funds.”

“Client awareness of the Challenger Annuities brand has also contributed significantly to planners’ ability to recommend annuities, helping to grow the market”.

CFS FirstChoice was the highest rated platform for pre-retiree/retiree capabilities overall

Planners generally rate their platforms exceptionally well overall. While platforms’ ability to service pre-retiree/retiree clients also score well, the evolving needs of planners means a gap is emerging, which is an opportunity for differentiation.

With the recent addition of annuities and supporting tools and education well received by its users, CFS FirstChoice now leads the platform industry in terms of overall planner satisfaction with its pre-retiree/retiree servicing capabilities.

The top four platforms by planner satisfaction with pre-retiree/retiree capabilities are:

1. CFS FirstChoice
2. Macquarie Wrap
3. CFS FirstWrap
4. Asgard eWRAP

Planners seek the next generation of retirement modelling tools and calculators

The majority of planners (84%, up from 82% in 2014) are seeking assistance from product providers to better service their pre-retiree and retiree clients. They most commonly seek online tools and calculators, ahead of education/awareness initiatives and improved products.

“Planners want product providers to equip them with the necessary tools to engage their pre-retiree and retiree clients,” said Peker. “Having the right products is important, but these need to be backed with interactive tools and calculators that planners can use alongside their clients.”

The post Retirement Planner Report shows advisers becoming more sophisticated in product offerings appeared first on AdviserVoice.

Peker Recep

Tablets devices are set to become a key part of the advice process in the future

In its twelfth year, the May 2015 Planner Technology Report is an in-depth study of Australian financial planners and their technology needs. The study is based on a survey of 892 financial planners concluded in May 2015. This year’s study highlights a number of interesting trends:

Tablets devices are set to become a key part of the advice process in the future

Tablets, convertibles (e.g. Microsoft Surface) and similar touch screen enabled devices look set to play a significantly greater role in planners’ businesses in the future. 37% of financial planners already use tablets for business purposes and a further 41% would like to do so. Tablet adoption is highest among financial planners aged 40-54 (39% say they use them in their business).

“Planners are going mobile, with nearly eight in ten seeing a role for tablets within their business,” said Recep Peker, Head of Research for Wealth Management at Investment Trends. “Planners see the value of tablet devices as making new business processes more efficient and enabling ongoing client engagement.”

“There is strong evidence that tablet devices can play a key role in enhancing the client engagement experience – our consumer research found planner clients had extremely positive experiences when a tablet device was used by their financial planner,” said Peker.

Consequently, planners will be relying on technology providers more than ever for mobile optimised solutions.

Advisers seek and are willing to bear the cost of improved integration in their business

One of the biggest challenges faced by financial planning businesses is integration between their systems, with 88% of planners seeking integration improvements. Notably, 43% of financial planners are willing to use costlier solutions (either platforms or planning software) to have their integration needs met.

“Integration is a daily source of friction in planners’ businesses and any improvements towards alleviating this are likely to be well received by financial planners,” said Peker. “The largest integration opportunity is through streamlining the platform account opening process from planning software.”

Platforms and software providers have the opportunity to work closer together to improve integration and hence business efficiency. XPLAN has the greatest reach in planner relationships.

XPLAN cements its lead in the software industry with its strong position among large dealer groups

Financial planners’ freedom of software choice remains at its 2014 high, with 52% expressing full or limited freedom in software selection. This compares to just 39% in 2013 who had freedom of choice of software.

XPLAN is financial planners’ most used software solution with half of planners saying they use the software as their most-used. COIN holds onto second place with 19% of primary planner relationships.

XPLAN’s market share continues to strengthen with strong dealer group support. 53% of planners who started using their software within the last two years use XPLAN. This compares to 48% among planners who have been using their software three or more years.

The top three planning software by number of primary relationships are:

1. XPLAN
2. COIN
3. Midwinter

Midwinter has the highest satisfaction amongst its users, while AdviserLogic had the largest increase in satisfaction

Among planning software providers, Midwinter achieved the highest overall satisfaction rating from its users.

Compared to 2014, financial planners are rating their software significantly better across many of the elements measured by Investment Trends, notably for mobile access, transaction reporting and user interface. AdviserLogic registered the largest increase in planner satisfaction between 2014 and 2015 to consolidate second place.

The top three planning software by planner satisfaction are:

1. Midwinter
2. AdviserLogic
3. AdviserNETgain

The post Key findings of the Investment Trends 2015 Planner Technology Report appeared first on AdviserVoice.