Sarah Brennan

Netwealth, HUB24 and Praemium continue to dominate Investment Trends’ Platform Benchmarking and Competitive Analysis report, with the three independent platforms beating all larger market share counterparts.

On rating overall platform functionality Netwealth scored the highest with 91.5 per cent in the latest analysis, followed closely by HUB24 with 91.1 per cent and Praemium with 89.3 per cent.

Legacy platforms Macquarie Wrap, CFS First Choice and AMP North all posted solid improvements over their 2020 score.

“Ultimately the high level of competition we have observed among all the platforms in the report has really benefitted advisers and most importantly the clients of those advisers whose superannuation and investments sit on these platforms,” Sarah Brennan, Investment Trends chief executive, tells Professional Planner.

Investment Trends noted the new regulatory requirements over the last two years, like fee consent form requirements and the Design and Distribution Obligations, have put pressure on the platforms to update their functionality to meet adviser needs.

The researcher pointed to HUB24 as a successful example: when it came to DDO it implemented an integrated online chat tool for advisers to raise complaints and report significant dealings.

Benefitting from banks’ exit

The decline of vertical integration has been a boon for the small independent firms as Netwealth, HUB24 and Praemium have all seen their market share more than double in the last couple of years.

“We’ve seen significant activity with the bank’s exiting wealth and specialist platforms have been a benefactor of that,” Matt Heine, Netwealth CEO has said.

Netwealth, the biggest of the three with a 5.2 per cent market share, is still dwarfed by major players led by Insignia (21.1 per cent) and BT (18 per cent).

With the exception of Insignia (which increased its market share from 4.5 per cent to 21.1 per cent between September 2019 to 2021 due to the acquisition of MLC wealth), BT, AMP and Commonwealth/Colonial Group have seen a reduction.

Battle is on

Despite not having the resources of the juggernaut platforms, the high ratings are significant for the smaller platforms which are competing without the benefit of scale.

Even with the success the smaller players are having, Praemium noted that scale is still a necessary part of improving business efficiency.

If there is any more confirmation needed this type of growth is on the mind of their rivals, Netwealth attempted to acquire Praemium last November which was declined.

“We just felt the price wasn’t at a level that would make it attractive for our shareholders,” Praemium CEO Anthony Wamsteker said, reflecting on the offer in January.

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