Platforms 2012

Will 2012 be the year of the next generation platforms?


As we all know, the retail platform business model is under pressure from:

• A large and growing self-directed investor segment which is using SMSFs as its preferred vehicle
• Rotation by planners away from managed funds to direct assets (including equities and term deposits)
• Improvements in technology which are allowing planners to rotate away from traditional platforms entirely; i.e Web Superfund or Managed Accounts linked to SMSF platform.

Those pressures are most evident at the top of the market, but they won't stop there. Already this is starting to erode traditional platforms’ and fund managers’ dominance of retail flows and assets, and ability to maintain pricing levels.

If you take a long term view of the evolution of the industry, the business model is in transition. The dominance of the existing model is fading, but the dominant new model is not yet clear. This environment is particularly difficult for big players, and favours insurgents and innovators. But it will pass, so hang in there.

Clearly there is a time for change, and for starters 2012 should see more new low-cost services offered directly.


Here’s why:

• The removal of embedded remuneration has leveled pricing between the planner and direct channels.
• SMSF's a niche segment but it controls a substantial percentage of super assets.

The problem is that SMSF's is a "cottage" industry, with no economies of scale to match the retail platforms.


While there are in excess of 400,000 ATO registered SMSF's, the top SMSF administrators hold less that 5,000 funds, many are run out of small accounting practices with less than a dozen funds.


Today SMSF's have in excess of $100 billion of listed equities and $80 billion of cash and deposits alone..


What is required is retail fund economies of scale, while at the same time meeting the mandatory SMSF specific compliance requirements..


Dealer groups, and Advisors, check out our Managed Account linked, Zero administration Web Superfund service, which is aimed at exactly this $180 billion market.


Charles Moore
CEO VillageMall Pty Ltd



Disclaimer The contents of this site should not be understood to be accounting, taxation or investment advice but rather as general product related educational information that may or may not meet your specific requirements.

The FOFA (Future of Financial Advice) reforms and ongoing market volatility is causing many financial planners to look at ways to create or improve value for their clients

As the uncertainty in investment markets continued, managed accounts were becoming increasingly popular among investors and financial planners.

With the FOFA (Future of Financial Advice) reforms and ongoing market volatility causing many financial planners to look at ways to create or improve value for their clients, managed account solutions are being looked at more closely.

Managed discretionary accounts are particularly attractive for planners as they can be tailored to suit the requirements and licensing structure of a financial planner's business and deal with flexibility around custody structures and investment reporting, plus unlike many pooled investments like managed Funds and MIS, and even SMA with beneficial ownership an MDA can be setup with fully segregated HIN and bank account for each client..

With a properly setup MDA a dealer group can offer advisors the ability to offer professionally managed Investments, directly owned by the client, with the same ease as a traditional managed Fund..

Disclaimer The contents of this site should not be understood to be accounting, taxation or investment advice but rather as general product related educational information that may or may not meet your specific requirements.

International Cuisine

Buying American may be frowned upon at the supermarket, but it isn't always a bad thing.
An American diet of hot dogs and fries may not be great for your health, but being too "Australian" focused when investing could be damaging to your wealth.

The global financial crisis significantly increased investors' worst fears about the stockmarket being risky. As a consequence, many consider it prudent to play it safe by investing in domestic markets and companies they know. Yet the ideal investment portfolio is believed to be all about diversification and against putting all your eggs in one basket. Standard investment portfolio theory says investors should diversify across many markets in the hope that when one falls another will rise to smooth out the final result.

Based on this conventional wisdom, Australia – representing just 3% of the global economy – deserves just 3 cents of the investment dollar. But Australian investors usually ignore this rule and, on average, put nearly 80 cents into local investments. The bias to investing at home, instead of abroad, comes at a price – a higher cost of capital for businesses.

The recent credit crunch hit America hard because its popular managed funds had invested 87% in domestic companies, and many were affected by the severe US recession. Yet that is not as parochial as some other countries – Japan, China, Brazil, Taiwan, Thailand, India and Malaysia – where more than 95% is invested locally. The exceptions to the rule, with less than about 30% invested at home, are Austria, Belgium, Denmark, Germany, Hong Kong, the Netherlands, Singapore and Switzerland.

The local market also has a heavy leaning to resources and small-caps relative to the MSCI World Index. So while the Australian index has generated higher returns, it's a narrower and riskier market. Most informed investors are aware of the domestic market's financials and resources tilts. This helped fuel the strong returns from the Australian share market over the middle of the past decade, but it was also a principal reason why the local market was challenged in 2008.

The two aforementioned sectors accounted for almost 60% of the S&P/ASX 300 Accumulation Index at March 31 2009. On the other hand, very few technology, healthcare or consumer staples firms are local index constituents. The last two were the place to be in 2008, and savvy global share fund managers were able to position their portfolios appropriately. "Australian-only investors don't have this luxury."

Ask your advisor about a "Global Trader" Managed Account Service.

Charles Moore

CEO VillageMall Pty Ltd
+61 7 3256 7465

An exciting new year for 2012.

2012 looks like being another challenging year for many advisors, and their clients, but we see a year of opportunities..

• The release of the first zero data entry or manual admin, SMSF service, when used with one of our MDA services!
• Enhanced Options and tax reporting within our "Client Investment" report pack
• Release of our daily emailed "Client Investment" Report

Our objective this year, is to assist advisers, to significantly reduce their costs; while providing enhanced service to their clients.

A reminder, that all access accounts are free to Advisors.

If I can assist you, in the new year, feel free to contact me..

Charles Moore

CEO VillageMall Pty Ltd