A recent survey conducted by Investment Trends found that 26 per cent of financial planners use BT/Asgard as their primary platform provider, while 19 per cent use CBA/Colonial First State.
The increasing market share of the two big banks has been driven by consolidation within the market over the past decade – notably Westpac’s acquisition of St George Bank in 2008, which included Asgard Wealth Solutions.
The Investment Trends survey also found that the average planner uses 2.5 investment platforms these days, down from 3.5 in 2009.
According to Ms Power, the current compliance burden faced by planners makes it unsurprising that they are reducing the number of platforms used in their offices. In addition, the cost of compliance and regulatory change in recent years mean it is important for platform providers to have sufficient scale, she said.
“The combination of increasing costs and lowering fees means you need to be big and you need to be able to reinvest [in the platform],” Ms Power said.
BT has not only invested in additional features (such as Future of Financial Advice compliance) but also in ease of use – something that advisers have demanded, she said.
However, she rejected the suggestion there is a lack of choice in the platform market, noting that there are a number of platform alternatives available to advisers.
She pointed to direct share trading services, managed funds and term deposits, as well as the “platform-type services” being rolled out by several industry funds. In addition, some of the smaller platform providers can be “very nimble and quite strong competitors”, she said.
“I think what we will see is a lot of new entrants coming to the market with platform alternatives like self-managed superannuation fund (SMSF) services and things like that,” said Ms Power. “We need to be able to offer solutions to accountants and SMSFs – having that diversity is going to be really important.”
