ING Direct will ramp up its presence in the niche platform market and commit to the SMSF segment as it targets $5 billion in funds under advice by 2015.
Australia’s fifth-largest retail bank, ING Direct presently has more than 2400 accredited financial advisers across 243 dealer groups in Australia, which executive director distribution at ING Direct, Lisa Claes, says is above expectation and aligned to ambitious growth plans for the business.
The company has non-aligned, boutique advisory groups firmly in its sights and has noted a “significant appetite” for retail investment platforms.
“Eighty-five per cent of adviser-placed funds are channelled into investments using platforms,” Claes says. “This allows financial advisers to spend more time servicing the needs of their clients or attracting new ones.
“We are investing in projects that will see ING Direct carve out its platform strategy and our primary target is in the niche platform market. These platforms typically offer boutique self servicing capabilities to advisers, have a brand affinity to ING Direct and are able to operate within ING Direct’s operational interface.”
The adviser distribution business currently boasts $1.1 billion in funds under advice and a further $150 million from platform funding.
“We are strategically positioning our business for exponential growth in the coming years, with the target of $5 billion in funds under advice by 2015,” Claes says.
The second push involves the SMSF market where Claes believes advisers are crying out for strategic advice. While investors generally think of cash as something to be spent or invested for buffers and emergencies, cash in a deposit account is increasingly being seen as an investment and, in troubled financial markets, can outperform other asset classes such as bonds and equities.
“In a recession ‘cash is king’ and investors seek the security of cash safe havens,” Claes says. “The experience of capital loss, particularly for pre retirees, during the GFC is raw – and as the returns on equities have not returned to what they were, cash is a safer option.
“The SMSF sector has also revealed cash is now being treated as a legitimate long-term asset class among the trustees of these funds. It is an asset class actively used to reduce risk, even out volatile returns and provide income in the retirement phase.”
With cash no longer a ‘set and forget’ asset class, ING Direct says its feedback from advisers has been that they need assistance with cash strategies.
“We recognise the relationship that clients have with their advisers,” Claes says.
“As such, our dealer group and advisers have the confidence in knowing that ING Direct will never directly market to any adviser clients.”
