Ann: FY18 Update, page-25

So much misinformation being spread on both HUB and NWL forums by someone with 4 posts under her belt on Hotcopper, one of which was a breach of TOU and a a held and sell rating on both stocks; something smells a bit fishy to me...

Firstly, the major bank platforms are playing catch up in respect to their managed account offerings, and some have started to now offer some functionality. I'll leave it to their respective users and independent researchers like Investment Trends to determine how good it actually is though.

The bank, AMP and IOOF platforms generally offer far from competitive functionality, with BT Panorama and maybe CFSCS (First Wrap) being the exceptions, however CFSCS have lost significant ground over the past few years.

They are all still playing catch up, in far more areas then simply managed accounts. If you review the last 3-4 years of Investment Trends analysis reports (sorry I can't provide) they have so far proven they are insufficiently agile to be up for this challenge and both HUB and NWL simply move further ahead. The only platforms who make any ground, is some of the other specialist platform providers.

Secondly, non-custodial SMAs is an odd term however from my understanding you are both referring to a business providing a service to operate a Managed Account but do it through a broker, another provider, even directly through the registrars of the underlying holding. I am not sure what benefit this would provide, and why a platform would provide such a service. If they were the Responsible Entity for the product, it would just reduce the control they have over the service being provided, add unnecessary risk and reduce their ability to charge fees on the custody of those assets.

The only companies I have heard of providing such a service, are adviser licensees; however most of these have now moved onto platforms to manage the RE requirements and custody of the assets.

Providers of Managed Discretionary Accounts will still manage accounts in this way in some cases, however even these are moving more towards platforms for the administration and reporting benefits.

Finally, the significant changes in FUM flows aren't a result of HUB or NWL offering super cheap fees, in fact the vast majority of flows are the result of significant transition of advisers from alligned to independent dealer groups or these firms becoming directly licensed and then choosing one of these platforms due to the better functionality and superior service provided.

Fees are one of the considerations and obviously larger dealer groups have more sway in this respect, so will invariably get better deals from a given platform, Fitzpatrick is one such groups. This isn't anything new, and all bank alligned platforms have always been doing the same thing.

BT's recent move is probably the least opaque at the moment, and appears way cheaper than everyone else. There is a bit of smoke and mirrors, like the fees on cash is alot higher, less accounts can be linked for discounting etc, however it is really cheap. The thing is, they have already been offering large dealer groups these rates or their abouts for years, so all it has done is piss off these dealer groups as they are now no longer cheaper.

I think you will find NWL increasing its tiers, as it is doing in some cases (not all) is bringing it in line with HUBs, their main competitor, so comparisons for larger dealer groups they are competing over is on a more apples for apples basis in respect to fees.

Hopefully this adds a little more clarification on the subject.