www.moneymanagement.com.au
MAGAZINE OF CHOICE FOR AUSTRALIA’S WEALTH INDUSTRY
Vol. 34 No 10 | June 18, 2020
FINANCIAL ADVICE
Cost of adviser registration
16
EQUITIES
22
Alternative sources for income
RATE THE RATERS
The law of quant amid COVID-19
Platform consolidation on the horizon BY MIKE TAYLOR
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Fund managers torn between SQM Research and big research houses FUND managers have again delivered a mixed picture, with preferences being split between fast-growing SQM Research and two of the biggest research houses, Zenith and Lonsec, according to the first part of Money Management's 'Rate the Raters‘ survey. The annual survey examines fund manager sentiment and their relationships with the research houses that rate their products. This year’s result was very different because of the COVID-19 pandemic and the partial lockdown of global businesses around the world. Fund managers used their responses to the survey as an opportunity to flag a number of new disruptions in their relationships with research houses. The difficult time resulted in more requests for data, additional difficulties around meeting offshore-based portfolio managers and, in some cases, holding back ratings on new products. Having said that, fund managers recognised once again the value of North Sydney-based SQM Research which placed first in four categories: transparency of research process, staff quality, feedback, and rating satisfaction. Zenith was appreciated for its research methodology and saw the highest number of respondents who said they had their products being rated by the agency. At the same time, Lonsec was voted the winner in one category for its accurate selection of peer groups and sectors.
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THE Australian investment platform market is facing further consolidation with Colonial First State (CFS) now in the hands of private equity, MLC close to sale and with Westpac/BT understood to have briefed some dealer group executives about its future intentions with respect to its array of platform offerings. Dealer group executives have told Money Management they expect that, in the end, BT/ Westpac’s platform offerings will be focused on BT Wrap and Panorama, leaving a question mark hanging over Asgard. Senior platform executives had also noted the changes to the market driven in large measure by the exit of the major banks, leaving Netwealth and HUB24 to dominate adviser satisfaction
ratings and acknowledged the likelihood of further consolidation, particularly as the sale of CFS and MLC play out. However, they are also suggesting that while there may be fewer platform offerings, those platforms may have to have greater scale in circumstances where many are already arguably much smaller than the largest industry superannuation funds. HUB24 director of strategic development, Jason Entwistle said the consolidation would be driven by the reality of net flows, in circumstances where the days of healthy inflows had ended with many of the major platforms now having to deal with outflows. He said that when this was taken together with the expected changes to ownership at MLC and Continued on page 3
AFCA hit by super early release complaint surge THE Australian Financial Complaints Authority (AFCA) has confirmed the degree to which superannuation fund members have become irritated when their superannuation funds have sought to check the validity of their claims under the Government’s hardship early release program. AFCA has confirmed to the House of Representatives Standing Committee on Economics that 89% of complaints it received had related to the denial of early release superannuation or delays in facilitating early release. The issue has become such that AFCA said in some instances it has initiated weekly meetings with superannuation trustees. “…a significant number of COVID-19 related superannuation complaints are about early release of superannuation. The most Continued on page 3
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