Peter Brook

Xplore Wealth Limited (ASX: XPL) has announced the sale of its 50% equity holding in the highly successful, Queensland-based financial planning practice McGregor Wealth Management.

Xplore Wealth has signed a binding agreement to transfer its shareholding back to an entity controlled by Rob McGregor for a consideration of $500,000 plus the repayment by this entity of $225,000 in loan funds.

McGregor Wealth Management is a financial advice business founded by Mr McGregor, one of Australia’s leading financial planning practitioners and industry entrepreneurs, having also co-founded the highly successful GPS Wealth.

The equity sale follows a request by McGregor to buy back the Xplore Wealth shareholding in his firm.

Strategic direction

The separation of advice from investment administration services is aligned to the broader industry trend of de-coupling advice from product and enables Xplore Wealth to focus on its strategic vision to support high quality advice practices with its platform solutions.

“Xplore Wealth was pleased to support Rob establish his business, and we’re proud to see it up and running successfully today. We look forward to continuing to support Rob and his team through our platform solutions”.

“We thank Rob for his professionalism and wish him the very best in his future endeavours as a provider of high-quality financial planning services in Australia,” said Peter Brook, Xplore Wealth Limited Non-Executive Chairman.

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Arthur Naoumidis

Expanding our reach further into platforms, DomaCom has announced the first fractional property acquisition on investment and superannuation platform, HUB24.

“Increasing our footprint on platforms is validation that our fractional property fund is gaining wider acceptance and a place in portfolio construction that can fit into any structure”, said CEO, Arthur Naoumidis. It also demonstrates the flexibility of the model that platform and non-platform investors can invest in the same asset”.

“We’re very pleased to add HUB24 to the list of platforms coming on board with DomaCom and in this case it is GPS Wealth adviser clients who have completed a crowdfunding campaign to acquire two properties in Victoria and Queensland”.

In a similar way to managed accounts and portfolio models DomaCom’s innovative fractional property investment model is finding a home on platforms to meet the demand for greater access to property investment, making it easy for advisers to include this asset class in their service delivery.

The Fund enables advisers to allocate a precise amount and in doing so approach property as a portfolio strategy investing across multiple properties, property types and geographic locations, eliminating the single asset risk exposure that most property investors take.
The Fund allows investors to access property across residential, commercial and rural sectors.

From a liquidity perspective DomaCom property sub-funds have a 5 year term to expiry that triggers an exit if required or can be extended on a vote of unit holders. DomaCom also operate an online liquidity facility that enables investors to place their units for sale at any time which is a considerable advantage over the redemption process of unlisted property trusts.

In responding to the question of how advisers can “offer” real property, GPS Director, Rob McGregor, said, “We engaged professional property advisers to locate two residential properties in different states to give our clients some diversification. Soon to settle these two properties, valued at around $1m, will provide some diversification for the 9 investors who have come together in the Fund”.

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Grahame Evans

Independently-owned dealer group GPS Wealth has slashed investment fees in half by implementing a Managed Discretionary Account (MDA) solution and turning its back on expensive master trusts and wrap platforms.

New clients of GPS Wealth pay an average investment management fee of between 0.6 and 0.8 per cent of assets under advice compared to fees of up to 1.5 per cent previously, according to GPS Wealth managing director, Grahame Evans.

The group also expects to transition around 60 per cent of existing funds under advice into a MDA structure over the next couple of years.

“The MDA is only for new money at this stage but we’ll be seriously considering the service for existing clients as part of the review process,” Evans said.

“Platforms and managed funds are still very expensive and inflexible, and our philosophy is to add value through asset allocation and by keeping fees down and preventing clients from making silly, emotional investment decisions.”

“The future of financial planning is one where investments are held in the investor’s name, costs are minimised by using passive investments where suitable and advisers better educate their clients about behavioural finance.”

Established in February 2012 by former PIS advisers, Greg Holman and Rob McGregor, GPS Wealth now has 32 practices and over 50 financial advisers across Queensland and New South Wales.

Evans, formerly general manager of PIS, joined the group last year. He said the managed account structure allowed the group to build tailored direct portfolios based on clients’ individual objectives and tax situation.

GPS Wealth signed a deal with specialist MDA operator, managedaccounts.com.au in May 2013, after a rigorous search. The group spent six months implementing the service, which involved establishing an investment committee, investment charter and a new risk management framework.

Evans said the MDA solution underpinned the group’s investment philosophy and mantra of “Exciting life, boring money”.

David Heather, chief executive of managedaccounts.com.au said legislative and structural changes to the financial planning industry were driving many advice businesses to find a more efficient investment and administration solution.

“A managed account solution can deliver many benefits to advice businesses, advisers and clients,” Mr Heather said.

“Advice businesses can centrally manage and implement direct portfolios that and advisers can focus on delivering portfolio solutions that meet their clients’ personal needs and objectives without the need to produce a Record of Advice for each change to the portfolio. There’s less administration and paperwork and more time in front of clients.”

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