Speaking to InvestorDaily, Mr Heine predicted that managed accounts would be a “big theme” at the 14th Annual Wraps, Platforms and Masterfunds Conference in September.
“It’s partly because [managed accounts] are going to be more mainstream, with some of the larger wraps releasing their versions,” said Mr Heine.
Netwealth is “still on track” to roll out its own managed account offering by the end of September, he said.
Asked about the recent listing on the ASX of managedaccounts.com.au, Mr Heine pointed to a turf war between the smaller niche platform providers and the “larger end” (in which he implied netwealth may now sit).
“[The smaller players have] been able to grab a bit of market share because they’ve been offering products that haven’t been available in the market – specifically around that managed account structure,” he said.
“Moving forward, do they actually have a place once the mainstream platforms all have their equivalent?” asked Mr Heine.
“Can they continue to win market share, and if they are going to continue to win market share is it going to be purely off the back of pricing which is unstainable?” he asked.
While many of the deals that are currently being made to win new clients are “great for the client”, Mr Heine said he didn’t believe they would be sustainable in the future.
“It’s going to be interesting to see how that plays out, and how they actually can build scalable businesses that make money and allow them to reinvest back into the platforms because everything is moving so quickly,” said Mr Heine.
“The smaller players have got a niche and they’re able to offer product for the moment – which may not be around for six months,” he said.
Dealer groups will have to ask themselves whether it is worth taking on a business risk with a small platform provider just for a better price, said Mr Heine.
“I think that’s going to be an emerging trend, and one that’s going to be well worth watching,” he said.
