Listed financial services firm Praemium has launched a new platform designed to compete with major offerings in the market, such as Colonial First State’s FirstChoice and BT Wrap.
The platform, SMARTwrap, charges a headline rate of 82 basis points per annum to administer clients’ assets.
Of the 82 basis points, 32 basis points or a maximum of around $2400 is kept by Praemium.
Dealer groups and financial planners can choose to retain the remaining 50 basis points or rebate it back to clients.
SMARTwrap is designed to assist financial planners in their challenging move from commissions to fee-for-service, Praemium chief executive Arthur Naoumidis said.
“We are deploying SMARTwrap with two pricing figures. One is what we call factory gate, which is the actual wholesale cost that we have as the wrap provider, and which is 32 basis points,” he said.
“On top of that we have added a 50 basis points margin that advisers can use as rebate fees for the transition period. As they move to fee-based, they can then switch it off and the platform would just feed that back to the client.
“So, effectively over the next two years people can start transitioning their business from rebates to fees. Now at any given point in time a financial planner will have both fee-based clients and commission clients and they are all on the same platform.”
SMARTwrap uses the same technology as Praemium’s V-Wrap solution, which administers over $40 billion of assets.
SMARTwrap’s investment menu consists of direct equities, including exchange-traded funds and listed investment companies.
It also offers around 650 wholesale managed funds and separately managed accounts via BlackRock’s Customised Portfolio Service, for which Praemium provides the underlying technology.
SMARTwrap can also administer uniquely held investments including direct property, boats and artwork.
Praemium has chosen to compete in the platform market as it can now offer custody services and the regulatory environment is changing, Naoumidis said.
