Shannon Bernasconi

WealthO2 has launched a managed discretionary account (MDA) best of breed service bringing together the who’s who in managed accounts.

The service makes it even easier for advisers to access the expertise of Australia’s top managed account investment managers including BlackRock,  Evergreen, Lonsec, Morningstar, Ralton AM and Zenith, said WealthO2 managing director, Shannon Bernasconi.

WealthO2 is the provider of the MDA removing the requirement for advisers to have MDA authority on their AFSL licence.

“It’s akin to a service equivalent SMA where the adviser is recommending the MDA service and the professional manager to their client, compared to the often higher cost equivalent SMA product,” Ms Bernasconi said.

“In addition the investment clients retain legal ownership of the ASX assets and get access to all corporate events.

“The MDA best of breed service is a logical extension to WealthO2’s existing discretionary and non-discretionary (ROA) adviser solutions across investments and superannuation. The best of breed managers not only bring their investment expertise but also the scale benefits to clients.”

Ms Bernasconi said for those managers that offer expertise in Australian listed or exchange traded products selection and asset allocation, the added benefit of WealthO2’s offering is that these assets are held on HIN by the end client.

“For investment clients that means both full legal ownership of the investment, and transparency, in addition to the tax benefits of the managed account. For superannuation clients this provides member level transparency and intraday trade execution, as well as member level tax component attribution.”

BlackRock Australia’s Head of Model Portfolio Solutions, Josh Persky, said “The addition of BlackRock Model Portfolios available on the WealthO2 platform is a welcome development. It enables advisers to use BlackRock’s models through both super and investments on HIN, increasing accessibility for more Australian investors to invest in cost-effective diversified investment solutions to fulfil their long-term financial goals.”

WealthO2 has seen sustained  growth in managed accounts – with over $2.6bn FUA and over 5000 advised client accounts in under five years since launch.

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Shannon Bernasconi

WealthO2 has launched an app on both Apple and Android to provide advisers and their clients with more flexible and streamlined access to their investment information.

Shannon Bernasconi, co-founder and managing director of WealthO2, said: “Advisers have been looking for smart phone access to their clients’ investments and super via an app, as a way of providing transparency on their holdings, returns and how they are progressing towards their goals,” she said.

“While increasingly we are seeing all ages of clientele utilising apps, it’s the next generation of adviser’s client who have viewed the issues from the Royal Commission and are even more aware of possible hidden fees and lack of transparency.

“Coupled with the new Your Future, Your Super reforms and the right of the consumer to transparency of assets, performance and of fees, a digital experience is key to advisers demonstrating value and trustworthiness to their clients, and also achieving strong client engagement.”

The new WealthO2 Client Portal app is a native app built to deliver easy and flexible access for advisers’ clients to their investment (including superannuation and pension) information. The UX usability based upon heuristic principles for app design contributes to the effectiveness, efficiency, and client satisfaction of the new app. It is the first in the market from an “on HIN” full-service platform provider.

According to the EY Global Wealth Management Research Report 2019^[1], the preference for mobile applications had doubled since 2016.  The report also showed that mobile apps were the preferred channel for 41% of clients for engaging with their financial adviser, followed by websites, face-to-face interactions and phone calls.

Ms Bernasconi said these numbers have only increased since the COVID-19 outbreak and the huge take-up of technology and virtual communications.

“Investors are much more comfortable with using technology to access all kinds of information and data than they were even a year ago, and advisers have also told us that many clients are more engaged with their financial strategies and processes thanks to the ease of technology.

“Taking the next step and providing investors with the capability to check their investments on their personalised app will only enhance engagement and interest.

“The new generation of investment platform client-centric, using technology innovation to deliver a digital client experience, to make advice more affordable, advisers more profitable and replaces revenue bias from products to customer service orientated design,” Ms Bernasconi said.

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[1] EY Global Wealth Management Research Report 2019 https://assets.ey.com/content/dam/ey-sites/ey-com/en_gl/topics/wealth-and-asset-management/wealth-asset-management-pdfs/ey-global-wealth-management-research-report-2019.pdf

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Shannon Bernasconi

WealthO2 has lowered the administration fee on its Super Simplifier by 3.3 basis points, capping fees at $1760 per member or $3630 across six family members, effective 1 June 2021.

This reduction comes as more advisers are adopting WealthO2’s Super Simplifier into their practice, creating scale benefits that WealthO2 is passing on to members, says Shannon Bernasconi, managing director WealthO2.

“WealthO2’s philosophy is to align its business with that of advisers and their clients, and this fee reduction is in line with that philosophy. As our business has grown, our ability to reduce the overall fund costs has increased, and we are passing on this scale benefit to the many advisers and their clients who have helped make this happen.

“This fee reduction, coupled with no minimum fee, makes Super Simplifier a very cost-effective product for those advisers looking to provide a market leading advice offering for super and pension clients, as well as provide a profitable service to the typically lower balance adult children of existing clients.

Ms Bernasconi noted however, that while price is an important factor when choosing a super fund, an adviser’s best interest duty requires more than a focus on cost.

“Super Simplifier gives members the personalisation, transparency and flexibility of a self managed superannuation fund (SMSF) but for a fraction of the cost.

“It is the only a low cost offering of its type in the market, and offers full transparency of assets through the use of the HIN structure and managed accounts.

“Unlike traditional platform offerings, all listed assets managed on WealthO2 are in the member’s designation name on HIN at a broker. All managed funds are held beneficially in a segregated WealthO2 uXchange account and all term deposits and at call funds are held in the member designation name through an Australian Money Market account.”

Ms Bernasconi says in any adviser practice, the total cost to client comes from both the cost to access the platform and the cost the adviser charges.

“The resulting profit margin for the adviser comes from how much the upfront advice document and process costs, and how efficiently that ongoing advice is managed.

“When it comes to lowering advice costs and increasing practice profitability, only the newer technology platforms like WealthO2 can afford to shift the margin from a product-led/ product-paid approach, to an advice-led and advice-paid focus.

“Platforms that haven’t kept up with the latest developments in technology have a higher cost of operation that is often recouped through hidden or layered fees. Hence the newer investment platforms like WealthO2 that don’t rely on cash fees, MER uplift or SMA fees for revenue, can lower the overall cost to the client even further.”

WealthO2 was recently voted number one in Investment platform Investment options in the Adviser Ratings 2020 Australian Financial Advice Landscape report as well as number one in Adviser Support.

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Shannon Bernasconi

WealthO2 has been ranked the number one investment platform in terms of ongoing adviser support, and the number one provider in terms of investment options, in the latest Adviser Ratings 2020 Australian Financial Advice Landscape report.

The Adviser Ratings report is an annual study of the Australian financial advice industry that includes a ranking of various attributes of the investment platforms and industry service providers.

WealthO2 was also voted in the top three, out of 20 providers, in net promoter scores and number three in overall functionality.

WealthO2 CEO and founder, Shannon Bernasconi says the report shows that advisers are voting with their feet.

“The demise of the vertically integrated institutional model of financial advice means independent financial advisers can, for the first time, access increased margins and a lower cost of advice for their clients.

“The next decade will be one where advisers have the opportunity to choose their own destiny, while also improving the efficiency and service they offer to clients, all at a lower cost.

“We are already seeing this shift underway, with a growing number of advisers voting with their feet and moving away from the older legacy platforms.

“WealthO2 was launched in 2016 to bridge the gap in the advice led technology available to advisers in the marketplace. It is designed on a unconflicted fee for service basis, putting the pricing power, the control of the narrative, the client communications, and the scale/efficiency back in the hands of the advisers, as well as removing the fee leakage of the current product led legacy platforms.”

She said that the combination of the findings of the Royal Commission and a continuously changing regulatory environment has seen the incumbents pushing resources into compliance rather than innovation.

“Some institutions have exhibited no real appetite to adopt or realise the benefits of modern technology – and advisers and their clients forced to use these laggard platforms have suffered.

“Others have engaged global software solutions to support new platform offerings, however these offerings have not been focussed on advisers’ needs. Instead, other revenue bias features have diverted the attention of these institutions and as a result advisers’ needs – and ultimately their clients’ needs – have been sidelined.

“At the same time, legacy platforms haven’t kept up with the latest developments in technology, leading to a higher cost of operation that is often recouped through hidden or layered fees.”

Ms Bernasconi says the WealthO2 offering adopts a naked pricing approach that has proven popular with advisers.

“We listen to advisers and what’s important to them. We have no other revenue source, no cash or investment clipping and hence we have a singular focus that propels our roadmap and our service culture”.

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Shannon Bernasconi

Recent legislative changes around consent to charge adviser fees are prompting a number of advisers to reconsider their existing platform relationships, in part because of a disagreement over who owns the relationship with clients, says Shannon Bernasconi, Managing Director, WealthO2.

Last week, the government passed the Financial Sector Reform (Hayne Royal 4 Commission Response) Bill which means that, from 1 July 2021, superannuation fund members must consent annually to trustees deducting ongoing adviser fees.

Ms Bernasconi says that a number of platforms have taken the step of contacting clients of adviser groups directly, without the advisers’ knowledge, about the changes – in some cases, six months in advance of the legislation being introduced.

“Understandably, many advisers are unhappy to discover that their platform provider has been in direct contact with their clients, without notifying them first, to advise them of potential changes to their fees.

“This isn’t the first time that some platforms have contacted clients of advisers – we saw similar instances when fees and commissions were turned off by some platforms well in advance of legislation.

“No doubt the platforms believe they have good reasons for taking this step, and circumventing the adviser’s relationship with their clients.  They may claim that it is a regulatory requirement, or perhaps an action to reduce liability.  Another reason may be that they lack the technological ability to obtain consent in a more adviser led or digital way.

“However it can be argued that the direct contact from platforms – often without the knowledge of the adviser – has caused unnecessary concern for clients and, as a result, for advisers,” Ms Bernasconi said.

She added that this issue is playing into a broader shift of advisers taking more control of which product, platform or service they use.

“The exit of the banks from the wealth management industry, and the migration of those advisers away from aligned distribution, is changing the way adviser groups select and use providers such as platforms, with more choice and flexibility now available to them.

“We find it surprising that some platforms have chosen taken a very blinkered approach with advisers, which doesn’t take into account the annual review process where the client is consenting to fees already.  Many platforms also don’t have the ability to generate a digital consent-based workflow and revert to a paper trail, adding more administration to the adviser process.

“Newer technology providers such as WealthO2 offer useful features such as bulk emails and bulk reporting that can be customised by the practice, with electronic digital signature workflows that allow advisers to control the content and “push and pull” of communications to the client, storing the compliance documents and activating consent based workflows.

“Another consideration for advisers are the providers who have integrated digital signatures and alignment of adviser opt in and annual fee arrangements with the Reform requirements.

“Such offerings provide advisers with control of the narrative and branding of communications with their clients, which can give both sides greater peace of mind,” Ms Bernasconi says.

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Mr Whelan joins WealthO2 from Midwinter where he led the sales, marketing and distribution teams.

Prior to this Mr Whelan held various senior roles including as director of advisor services at Milliman, and head of advisor services at Morningstar.

Ms Bernasconi, said: “Andrew has more than 20 years’ experience in the financial services market and his experience with Milliman, Morningstar and other financial technology providers makes him a good fit for the WealthO2 team.

“Andrew’s core focus throughout his career has been on developing new business opportunities as well as assisting advisers to deliver exceptional client outcomes.

“His appointment comes as WealthO2 is rapidly expanding the penetration of its adviser platform alternative in the market.

“WealthO2 offers leading advice-led technology, along with a broad service offering, that is unlike that of existing platforms. It is focused on supporting advisers by shifting the margin to the adviser and lowering costs of advice to clients.

“Andrew’s appointment to the executive team supports this strategic position.

This appointment follows the recent appointments of the Founders of HUB24, COIN and Macquarie Wrap to the WealthO2 board. Neil Roderick joined the board as Chairman and Darren Pettiona joined as Executive Director.

Mr Whelan holds a Bachelor of Commerce Degree in Economics from Macquarie University.

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Shannon Bernasconi

Adviser platform alternative WealthO2 has passed the $2 billion mark in funds under administration, reflecting the growing demand from advisers for a low cost fee for service, unconflicted, adviser platform alternative.

Shannon Bernasconi, CEO, WealthO2 says in the wake of the COVID-19 pandemic, the fees clients pay for personal advice, platforms and investment are under even more heightened scrutiny as asset levels have fallen.

“WealthO2 is the fastest growing adviser platform solution on an FUA basis, achieved during the midst of the COVID-19 uncertainty in markets. This growth is as a result of financial adviser demand for a conflict free investment platform model, and comes off the back of the unprecedented structural change in the advice industry,” she says.

“Wealth management practices want efficiencies and savings through technology, with the expectation that software and platform providers will act transparently and with integrity.

“FASEA’s Code of Ethics puts the onus on advisers to remove conflicts and act in best interests of the client. Products should be used as an output of good advice, and all the providers in the value chain, such as platforms and fund managers, should be paid a fee directly based on their value-added services.

“WealthO2’s naked pricing approach of the platform appeals to advisers, as it strips out fees exchanged between third parties in the value chain of advice, and discloses only those fees payable by a client on a clean basis, void of revenue bias or conflict.

“Advisers and advice, not products, are the essential lead in the wealth value chain, and the ability for technology and service providers to help advisers deliver lower overall fees to clients whilst making more profit decently will go a long way in securing the best possible outcome for clients,” Ms Bernasconi says.

The strong growth follows WealthO2’s recent launch of the WealthO2 Academy – which supports adviser education on the new features and provides CPD points for the training, the introduction of a new rebalance functionality – which provides further flexibility in the execution for market conditions or client best interest purposes, the appointment of Matthew Done as chief technology officer and the release of WealthO2’s new digital meeting tool which was launched in response to adviser Covid-19 demand.

A rollout of further enhancements and features will be delivered during 2020, making it even easier to access the benefits of the adviser platform alternative.

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Ms Bernasconi says Mr Done is a welcome addition to the team.

“Matthew is a highly accomplished application architect and development manager with experience managing and implementing several mission critical systems development projects.

“He has over 20 years’ experience in technology roles across a variety of industries from banks, to telecommunications to financial services companies, and he has solid experience in the implementation and management of software applications. He is an agile practitioner, who specialises in horizontally distributed applications for the cloud.

“His appointment follows strong demand for the WealthO2 adviser solution, and this demand will only increase as advisers continue to increasingly question the value that the traditional platform providers bring to their business and clients.”

Mr Done joined WealthO2 from global money transfer provider WorldFirst, where he was CTO of acquired FX Hedging company CurrencyVue. Prior to this he was the system development lifecycle (SDLC) manager for information technology and services company SAI Global.

His appointment follows the recent appointments of Arnold Castro as senior developer and Sotheany Vuth as finance manager.

Mr Castro has 13 years’ experience in development and joins WealthO2 from CBHS Health Fund where he was a senior developer (.net) and software architect.

Ms Vuth has seven years accounting and finance experience and joins WealthO2 from workforce solutions company GEO where she was finance manager.

Ms Bernasconi says the appointments come at a time of strong growth for the WealthO2 business, reflecting the growing demand for a low cost, unconflicted, adviser platform alternative.

The appointments follow the recent release of WealthO2’s new digital meeting tool which was launched in response to adviser Covid-19 demand.

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Shannon Bernasconi

Recognising the increased need – in the wake of COVID-19 – for advisers and their clients to meet digitally, WealthO2 has launched a new feature on its investor client portal to better facilitate digital meeting appointments.

“WealthO2 is an advice-led solution, so listening and responding to advisers’ needs is our focus,” says Shannon Bernasconi, WealthO2 managing director.

“It is clear that advisers will be using online face-to-face calls for their client meetings now and for the foreseeable future, and we have moved quickly to implement the functionality to facilitate this directly from the WealthO2 portal,” she says.

“The global pandemic has led many advisers and their clients to embed technology where it adds value in the advice process, and this new functionality is a natural extension of this move.

“This new feature brings advisers and clients closer when physical distancing rules are in place.  It allows clients of advisers to set up a meeting with the adviser, via the client portal, in Zoom or Acuity or whatever meeting or calendar platform the adviser uses.

“Quite simply, a client logged into their portal can schedule a meeting directly into their adviser’s calendar. It connects the clients with the advisers’ digital calendars to more easily facilitate the online face-to-face meetings.”

The technology allows for integration with the main providers such as Outlook, Google and Acuity as well as CRM and digital face to face providers like Salesforce, Zoom and the like.

WealthO2’s new feature enables ease of client / adviser connectivity, making it easy to schedule, for example, a 15 minute catch up and provide resulting compliance records of the file note and history. 

“Many online digital applications offer a recording feature so the call between clients and their advisers can be saved as a review meeting and file note. During these digital meetings advisers can share the screen with clients, whether it be a copy of the client report, or the screens from the system dashboards showing performance and income returns of the client’s portfolio.

“In the planning phase for this feature, 100 per cent of advisers canvassed said they would like this incorporated into the WealthO2 portal.

“In fact some advisers are saying that post the pandemic, they will continue the format of more regular 15 minute online meetings with clients, while keeping the face-to-face meetings for the annual review. It is seen as a change in business practice that will lead to better outcomes for clients and for advisers.”

Ms Bernasconi added the extent of the COVID-19 disruption to adviser businesses had them evaluating the value that platform providers bring more generally.

“For instance, platforms that are not able to provide bulk rebalancing of portfolios and ease of changes to all client’s portfolios intraday may not be as well regarded by advisers post this pandemic.

“If the technology of the platform provider did not assist the adviser in this ease of portfolio management in such volatile market times, it will ultimately be the clients who have suffered as a result of the implementation drag.”

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Shannon Bernasconi

Australian investors are the beneficiaries of technology-led disruption within the financial services sector as operational complexities are being continually reduced, according to Shannon Bernasconi, managing director of WealthO_2.

The combination of better managed data, as well the streamlining of documentation such as the Record of Advice, is driving efficiencies for both advisers and their clients, with technology also serving to remove intermediaries and their costs. The impact of technological disruption is becoming particularly evident within superannuation. 

Ms Bernasconi points to reports the ASX is set to roll out large scale disruption that will bring about savings and improved investor returns.

“The ASX innovation will allow super funds to more easily directly connect to the ASX and bypass the layers that can cause data errors and additional costs.

“While some progressive super funds will approach this opportunity at an omnibus level – such as a single HIN to replace the custodial layer – there is also the current opportunity of the HIN member level direct connectivity (for example, in the WealthO₂ Super Simplifier),” she said.

The operational costs embedded in super come from the multiple parties involved including trustees, super administrators, insurers, custodians and regulators.

“For those invested in Australian direct equities through a super fund, for example, there is often a custodial layer between the member and the ASX which is opaque and costly, and limits the range of corporate events the member is eligible for, such as share buy-backs and placements.

“HIN-based super allows the member to have full transparency on the underlying assets held on their behalf, and eligibility to all corporate events. It’s the advent of technology and data connectivity that has allowed this to happen,” she said. 

Technology is also disrupting the value chain of advice. While the banning of grandfather commissions will remove hidden fees from the value chain, technology is removing entire layers. Additionally, the removal of ‘shelves’ that traditionally hosted fund managers and, more recently, SMAs, at an increased cost to the investor.

“The investment option shelf within a super fund is an opaque layer that also potentially increases costs. In removing these shelves, a saving of five to ten basis points can be gained by the investor. 

“Only recently has the cost of operations been significantly reduced by using technology for administration and to ensure data quality through automation of validation tasks. Why haven’t these layers been removed sooner? Times have changed in the advice industry, and technology needs to be regarded as the best means to innovate and remain relevant,” said Ms Bernasconi.

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