Peker said planners who have direct shares as part of their offering recommend direct investment to 42 per cent of their clients, up from 30 per cent in May 2010.
“These planners expect to be providing shares advice to just over half – 54 per cent – of their clients by 2014,” he said.
“They are also recommending direct shares to a broader spectrum of clients, especially those with SMSFs and [more than] $100,000 in investible assets; though shares are still not perceived as a viable investment for low-balance clients.”
Peker said planners are becoming more confident in recommending direct shares to clients.
“Not only are shares recommended to more clients, fewer planners are waiting for clients to drive this advice, and fewer are citing compliance risk as a barrier to recommending shares relative to May 2010,” he said.
Selvarajah says Bell Direct has worked hard to integrate its trading platform into the software and technology systems planners already use.
“We provide the ability for a financial planner or client to use a best-of-breed solution” he says.
“We have created a number of ‘deep data’ integrations with organisations like OneVue, Class Super, BGL, Praemium and Xplan. That means the financial planner can use Bell Direct’s platform, Desktop Broker, without compromising their back-office efficiency.”
Investment Trends says that the increasing numbers of planners open to the idea of switching platforms means that “platforms and brokers alike have the opportunity to compete for a growing slice of planners’ businesses through their direct shares offering”.
But Selvarajah says “existing wraps and master trusts will find it difficult to cope with this transforming industry, given the amount of investment they have made in the incumbent technology”.
“In addition, these businesses are very much product-led,” he says.
“The wraps and master trusts have excelled as distribution channels for product to the financial planning community.
“So the biggest transformation will be that product-led businesses will have to transform to become client-led. Clients are more cynical about big business, more discerning about service and value, and they are searching for transparency. They want advisers who are not conflicted. And above all, they want ease and simplicity in how they use these services.
“Another big change taking place is that technology has become a lot cheaper to build. So newer technologies make it a lot easier for financial planners and dealer groups to integrate the latest systems into their businesses.
“They can take control of their technology and bring a best-of-breed solution to their clients without the traditional cost levels of building the systems themselves or having to build ‘work-arounds’ to accommodate old and clunky systems.”
