Sunday, September 06, 2009

Day One at the 9th Annual Wraps, Platforms & Masterfunds Conference

Bruce Madden is my fellow co-founder and a Director of BlueChip Communication. We attended one of the major Australian wealth management industry events together last week. Here's his summary of Day 1

Called "After the Storm" the 9th Annual Wraps, Platforms and Masterfunds Conference commenced in the Hunter Valley, NSW last Thursday, 3 September.

The event has attracted over 200 delegates from the retail financial services industry to debate and unravel the events following the Global Financial Crisis, and the what next for an industry under the pressure of several government inquiries (Ripoll, Cooper, Henry et al); a disenfranchised investor base and the prospect of looming regulation.

The primary themes?

There were a few but chief among them was trust. Or more pointedly, how to regain the trust of the poor burned investor. Perhaps somewhat curiously, or in recognition of the primary role that financial planners play with the industry's overall reputation, the conference spent much of the day debating the role of advice and the planning industry.

My view is that this is a clear sign that master funds and wrap administration platforms remain inextricably linked to the advice process (i.e.: a platform is a product not a service, and it is a product that is sold, not bought) - various speakers discussed their strategy to overcome the risk of further fragmentation of their reputation among investors.

MLC, which through its platform, Master Key, eschewed adviser commissions in 2006, stood to bask in the warm glow of vindication following its courageous public shift three years ago. Richard Nunn, the Head of Advice and Marketing at MLC / NAB described how the inquiry rate from advisers seeking to join the MLC affiliated advice businesses - in light of the many signals pointing to the demise of commissions - had recently increased markedly.

CBA Distribution Head, Paul Barrett, described the need to drive greater comprehension of financial products and services among the end investor, so that "all parts of the value chain take responsibility for their actions." In other words, creating better informed consent from investors about where their money is being invested and why. Or, put another way, to stop outsourcing our intelligence.

Other trends observed? The excellent research of Investment Trends showed advisers seeking safe investment harbours by investing in cash, and direct 'blue chip' shares; the rise of ETFs and indexing as investment products (driven by the desire to reduce costs wherever possible); an increase in the interest of using capital protected structured product (a la AXA North), and believe it or not, the selective increased use of gearing strategies on the basis of historically low asset prices, coupled with low interest rates... (now think about that for a mixed bag of counterintuitive trends!)

Other themes explored included new technology (including an excellent run down of BlueChip client Payment Adviser and its smart technology) and the external threats of regulation, markets and of course managing one's reputation (and FUM) after a crisis.

1 comment:

Thanks for reading. Constructive and relevant comments welcome!