Why client-led models are fundamental

Platform offerings have been too product focused to the point where client engagement and choice has suffered, says Arnie Selvarajah, chief executive of Bell Direct.

“To date, I think this part of the market has always been product-led,” he says. “And because it’s been product-led it’s, ‘This is what we want to sell you so you can only buy it in this way’.”

Selvarajah says the evidence of the lack of choice and flexibility in products means platform providers should be using a client-led approach.

“Let the client choose how they want to engage,” he says.

Selvarajah says e-Clipse Online, an integrated web-based trading platform, is addressing the issue of product-led models by providing a wider range of choice within a single product.

“What they have done which is quite innovative in my mind is that it’s obviously a self-managed account (SMA) within the model but they’ve created a really interesting engagement model with clients,” he says.

Selvarajah says clients will have flexibility in the ways they can engage with the relevant options within e-Clipse Online.

“It allows effectively [for] the client to trade, the adviser to trade on behalf of the client or the client and adviser to outsource all of that to e-Clipse, which then runs it through the SMA,” he says.

“The client can then choose to have either some money that they might trade themselves, some money that the adviser trades on her behalf and some money that is managed by the SMA.”

  Brett Westbrook, chief operating officer of e-Clipse Online, says the product was built to meet the needs of clients. “For any business to succeed in the current environment you’ve got to have the interests of your clients at heart and to actually understand what a client needs,” he says. “If we have a pure profit motive in place, well then we’d have our margins set at the same levels all other platforms are charging. “Realistically in this industry, platforms are all about scale – now I haven’t seen many of the bank-delivered platforms and products coming out [and] passing savings onto clients.” Westbrook says it’s “impossible” to compare e-Clipse Online to traditional wraps. “It’s not an IDPS (investor-directed portfolio services) structure and we’re not trying to present to our planners and our market a multitude of managed funds in which they can build their own portfolios from,” he says. Bell Direct’s Desktop Broker service provides e-Clipse Online’s direct equity trading. Approximately 40 accounts have been opened since its launch three weeks ago.