SPECIAL REPORT: Why more planners are going for brokers

He says that with Core Equity Services’ data feed capability with the major planning software, including Visy Plan and XPlan, the issue of consolidated reporting within a wrap is less relevant.

“The real question is, is the platform the hub [of an adviser’s business model] or is the planning software the hub?” he says.

“Whatever the research says, our sales reports show the hard truth. The trend towards online broking is definitely growing.”

The online brokers say one of the big draw cards for planners using their service is the lower cost, but Delaney says the argument that wraps are more expensive is simply not true.

“Planners can choose from 40 different brokers within the wrap to facilitate a trade, so the cost of the trade will be according to whichever broker they choose, and it’s clear and transparent. The other discrete fees involved in the wrap are based on each component in the chain,” he says.

“As an industry, we’re now dealing with a knowledgeable and discerning consumer. I’d dare anyone at this point to ignore the client.”

Delaney says as the Macquarie Wrap model is relatively advanced, the only significant new feature planned is the inclusion of model portfolios, which he expects to be available by the end of the year.

“Every adviser has their own way to manage client portfolios. We want to offer options for the adviser while still allowing them to tailor the macro to the individual client,” he says.

Selvarajah suggests that rather than planners making a channel choice for direct equity investments based on their own priorities, the key challenge today is to under- stand what clients are looking for.

“It’s a new world and planners need to deliver what their clients want,” he says.

“To do that, they need to ask their clients what they want; do they want to be advised? Do they want to place trades themselves? Do they want to review their own portfolio? Will they be using an accountant anyway, meaning reporting might be less important?

“In the past three years there’s been more written about financial services than ever before, including the way advisers are remunerated and how fees can be hidden.

“The client has changed in what they want and what they know – the average consumer is much better equipped and hungry for value. As an industry, we’re now dealing with a knowledgeable and discerning consumer.

“I’d dare anyone at this point to ignore the client.”