“Those [independent] platforms now are at a point where we think the technology is right. They’re reasonably cheap relative to other platforms out there – the unit trust style, the bigger platforms – and they’re quite flexible,” Mr Pezzulo told InvestorDaily.
While Perpetual itself is fairly agnostic as to which platform its SMA is available on, the larger platforms are still catching up in terms of their direct share investing capabilities, he said.
Independent platforms don’t have a back book to protect, can grow off a lower cost base, and they use a more modern programming language, making them cheaper to use, he added.
“They have external custodians and trustees, so the trust factor’s there, and they’re reasonably well capitalised as well,” he said.
He said there is also an element of market pull as many sophisticated investors prefer independent providers.
“[Investors] want to take control, they want transparency, they want to see what’s going on, and they want an efficient tax structure,” he said.
“Typically, that means pulling out of some of the trust-driven platforms. Trust is still a great product because you get the benefits of lower cost, but [investors] want a bit more access to direct [investments].”
The new SMA is available on Mason Stevens, HUB24, OneVue and Praemium, and the fact there are so many providers shows there is something going on in that space, he said.
“I always follow the real money. The real money’s showing up. It’s all private money as well that own these platforms typically, although one or two are listed. It tells you something’s going on in that space and there will be winners and losers in that space as well,” he said.
“Advisers have an opportunity to diversify and make choices with their business and select where they put their money for their clients.”
He said the Perpetual SMA, launched in May after a lengthy five-year incubation period to make sure the strategy worked, is also available directly to investors.
It uses the group’s institutional resources, with 10 analysts and six or seven portfolio managers in the team generating ideas every day, he said.
“You want to be able to take advantage of that in an SMA and if it’s a larger strategy, you can’t. As a [portfolio manager], I want to be able to generate alpha,” he said.
He added the strategy is capped at $300 million.
“If you saddle [the strategy] with a large target to generate inflows, the first client that gets in has a great time. By the time the last client gets in, they don’t have a great time,” he said.
“Perpetual’s mature enough to understand if you sell these niche-type products, you have to cap. Most high net worths want to be exposed to smaller strategies because it protects their returns in the long run.”
