While one financial institution has invested upwards of $500 million to build a new platform offering, one of Australia’s most active non-aligned players believes boxing clever will always beat a bottomless budget.
OneVue launched Luminous on Monday, a platform offering it’s group chief executive officer Connie Mckeage says marks a departure from the established design methodology behind investment platforms.
“We’re not going to spend $500-600 million on something, but we need to get it right for today, and not spend a lot of time trying to preserve the status quo.
“For 18 moths, we’ve gone down another path…you can’t outspend the opposition, but you can outsmart them, and we take that seriously,” Mckeage says.
For the consumer and adviser
Luminous is something of a hybrid between a traditional platform, which is adviser-led, and a consumer-focused tool – taking the best elements of both to create something new.
Mckeage believes that, in the case of building a new platform, incremental change was not enough, instead requiring OneVue to stop and reset completely.
“If you think that every [client] is starting with an adviser today, it’s a flawed model. Not many people, until they do their transition to retirement planning, are using a planner for everything,” Mckeage says.
The process hasn’t been an easy one, and OneVue has faced its fair share of pushback from advisers in the last year-and-a-half. “It’s very difficult when people say, ‘you’ve given up on the adviser market’. No we haven’t, we just think the operating model is broken.”
“We need a whole new operating model, and we believe in that so much that we’re willing to put up with the market saying that we’ve abandoned that market,” she says.
Building technology solutions that can be white-labeled by financial planning Australian Financial Services (AFS) licensees is OneVue’s core business model. As such, it naturally appeals predominantly to the non-aligned segment of the planning market.
Madison Financial Planning and Yellow Brick Road are two groups that are long-term OneVue clients – the latter using it within its GURU process.
“When you come at it as an independent…it’s tough, but we’re more committed than ever to changing the market. And the support that we’ve had for this has surpassed our expectations,” Mckeage says.
Somewhat surprisingly, during the earlier stages of rolling the product out to market, a number of institutionally owned AFS licensees had also engaged with OneVue’s Luminous platform.
“We started to get a lot of support [from institutionally-aligned licensees] and it was shut down. We’ve had bank-owned groups start to support us, but it was actually stopped, because the license was held by the institution.
“As word of mouth got along, we were told there would be no more cooperation [with OneVue], or they would have to change their licensee,” Mckeage says.
The consumer will win eventually
“In the end, it’s just a matter of time before consumers win. A lot of people have tried to stop the inevitable, or try and hang onto the status quo…but people grossly underestimate the consumer,” she says.
Luminous has two separate interfaces – one for consumers, and another for advisers. The consumer-led approach was designed first, with the adviser portal created around this – instead of the more orthodox approach of building for the adviser first and the consumer second.
“If we get it right for the consumer, the adviser part is just the consolidation of that. So what does an adviser need that an investor doesn’t? Not that much,” Mckeage says.
She believes the primary difference is that advisers need to be able to operate in aggregate, instead of individually.
“I can buy shares [as an individual]…but if [I’m working] as an adviser, I want to buy shares on behalf of a number of clients.
“An individual will want reporting, but an adviser will want reporting across their whole client base. All an adviser does on top if it is aggregate the information,” Mckeage says.
This also creates the opportunity for greater empowerment on the part of the client: “If I’ve got a really good relationship [with the adviser]…I can actually say ‘can you give me access to what you do’.”