Australian IFAs, Investment Managers and Platforms 2016

Publisher Name :
Date: 14-Dec-2016
No. of pages: 37


Financial advisors are a key distribution network for retail investors in Australia. All investment product manufacturers need to understand the priorities and criteria that advisors use to select their investment partners and platforms. As almost all advisors use a platform to manage their client assets under management (AUM), understanding why certain platforms are more favored than others is crucial.

Key Findings

  • The attractiveness of platforms is first and foremost ranked by the investment fund range and ease of use.

  • Investment product providers are regularly reviewed, with the majority reviewing their platforms at least annually.

  • Colonial First State remains the top platform provider, though BT Panorama is growing Westpac's BT wealth arm as well.

  • A minority of advisors are using discretionary fund managers, with this not likely to change significantly in the short term.

  • Cost is the top driver for switching platforms, highlighting the increasingly commoditized nature of the service.


This report analyzes the relationship that Australian financial advisors have with their product and platform providers based on our 2015 IFA Survey. It details the current use of platforms and the service arrangements advisors are seeking from their product providers. In addition to exploring the current relationships advisors have, the report looks at the best lines of attack for platforms looking to build their advisor networks.

What else does this report offer?

  • Insight into the business concerns of Australian financial advisors post-FoFA.

  • An investigation of the main features advisors look for in their platforms.

  • Market share of the leading platforms in use by Australian financial advisors.

  • Advisor ranking of the best platform packages in the market.

  • Key features that prompt switching among advisors.

  • Key recommendations for discretionary fund managers in what they can do to better appeal to Australian advisors.

Reasons To Buy

  • Understand key trends in the Australian advisor community's perception of product providers.

  • Understand how advisors are evaluating their platforms.

  • Target those features that advisors most value.

  • Improve advisor retention by understanding the services that advisors most want from product providers.

Companies Mentioned

  • Colonial First State

  • BT Financial

  • Asgard

  • Macquarie

  • MLC

  • AMP

  • IOOF

  • Netwealth

  • ANZ

  • Perpetual

Australian IFAs, Investment Managers and Platforms 2016

Table of Contents

Executive Summary
Key findings
Critical success factors

IFAS are A Key Distribution Channel
Retail distribution has long been a platform-focused channel in Australia
Assets invested via platforms rose to A$689.15bn in H1 2016
The bulk of retail wealth in Australia is ill-suited to investment via advisors or platforms

Platforms Remain The Dominant Channel For Advisors
Platform features
Fund range is key but a well-designed interface is also critical
Platforms need to be aware that advisors are under enduring cost pressure
Advisors are focused on growth and will want providers that can help them achieve this
The majority of IFAs rely on multiple platforms, with platform proliferation on the rise
Bigger firms are using multiple platforms to gain a best-in-class proposition from across the market
Platform alternatives are few and niche but are increasingly sought after
The wealth arms of the Big Four dominate the top platforms by use
A gap between use and top ratings suggests some churn in the platform market is likely

Product Providers Are Regularly But Infrequently Reviewed
Advisors do not have time to review providers more than quarterly or annually
Cost concerns are the prompt for a platform review in almost two thirds of cases
Keeping charges competitive is key to improving IFA retention

Advisors are Increasingly Interested In Using Third-Party Asset Managers
AUM under discretionary fund managers is still a fraction of advisors' total client assets
Asset managers should position themselves as freeing advisors to focus on the overall account
IFAs are looking for cost savings when switching DFMs
Increasing uptake of DFMs will involve convincing IFAs that fund managers know best

Abbreviations and acronyms
Future of Financial Advice (FoFA) reforms
Independent financial advisors (IFAs)
Managed discretionary account (MDA)
Separately managed account
Verdict Financial's 2016 IFA Survey
Verdict Financial's 2015 IFA Survey
Further reading
About Verdict Financial

List of Table

Table 1: Australian IFA personal AUM divided by number of platforms booked, 2016

List of Figures

Figure 1: Platforms have matured as a key source of AUM
Figure 2: Superannuation investments dominate the industry
Figure 3: Superannuation dominates the business of all types of IFA
Figure 4: Advisors are seeking out easy-to-use platforms with wide product ranges
Figure 5: Advisors have not moved on from PC-based platform interactions
Figure 6: Growth is the top concern for financial advisors, finally eclipsing regulation
Figure 7: Almost half of Australian advisors are operating three or more platforms
Figure 8: Smaller businesses are more likely to concentrate their assets on just a few platforms
Figure 9: Platforms from the Big Four dominate the market
Figure 10: Colonial First State has the most attractive platform package in the market
Figure 11: Annual reviews are the most vendors can hope for
Figure 11: Platforms have become more commoditized, with increasing focus on cost
Figure 12: Most discretionary fund managers are offered on platform
Figure 13: The major platforms figure prominently among DFMs
Figure 14: Most advisors that use DFMs devote only a minority of their portfolio to them
Figure 15: Client preference for specialist advice drives third-party asset management use
Figure 16: Low cost and a proven track record of delivering returns is what most IFAs look for in a DFM
Figure 17: Annual reviews of DFMs are most common
Figure 18: Most financial planners are confident they have the in-house expertise to manage investments

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    Summary Financial advisors are a key distribution network for retail investors in Australia. All investment product manufacturers need to understand the priorities and criteria that advisors use to select their investment partners and platforms. As almost all advisors use a platform to manage their client assets under management (AUM), understanding why certain platforms are more favored than others is crucial. Key Findings The ......
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