If the holy grail of investing lies in the concept of non-correlated return streams with which to build truly diversified portfolios, insurance-linked securities (ILS) should emerge as one of the options for investors; but they are still not well-understood. That was the message that John Wells, co-founder and chairman of London-based Leadenhall Capital Partners, had for The Inside Network’s recent Alternatives Symposium.
Gold’s spectacular rise has been a feature of the markets over the last couple of years, and judging from how the investment banks are sharpening the pencil on their price targets, that trend seems likely to continue, as gold’s ‘NETGO factor’ intensifies.
Platforms rise to multi-pronged set of challenges
The report says the average score has risen significantly over the past 17 years – from 48 per cent in 2008 to 86 per cent in 2024 – highlighting the platforms’ commitment to innovation across a wide-ranging set of criteria, including product offering, transactions, reporting, retirement solutions and online business management.
The main platforms rated were HUB24 – which earned top spot – BT Panorama, Netwealth, Praemium, North and Macquarie WRAP.
The report identified four emerging trends that are demanding a dedicated response from the platforms: the rise of previously advised clients (PACs), cyber-security, AI and the emergence of private markets.
It’s a staggering number but the report estimates that due to the “precipitous” decline in financial advisers, the cohort of PACs amounts to about 5.1 million people – with a significant proportion still having assets on a platform. Consequently, platforms are being forced to implements strategies to re-engage with these “orphaned” clients.
As Investment Trends’ finance and research director Paul McGivern told a webinar to discuss the report, platforms are actively working to improve the functionality available to PACs.
“A snapshot of the different things they are providing include target market determination, screening, online access to their investments, and the ability to transact, generate reports and view uploaded documents. In addition, there are educational resources and retirement guidance. So, they are focused on having meaningful functionality available to PACs.”
Cyber-security is another priority – but not at the expense of adviser convenience. With the banks and financial service providers coming under mounting pressure to strengthen their scam and fraud protections – the Federal Government’s Cyber Security Act became law in November 2024 and ASIC is assuming a more pro-active role – McGivern said cyber-security had become a huge focus for the platforms in the past few years. “From an adviser’s perspective, they want to be able to have great confidence in the platforms that they’re using and be able to convey that to their clients. But it’s critical that enhanced security does not interfere in the advice process – it’s a delicate balancing act.”
With AI adoption by advisers accelerating, platforms are increasingly integrating AI-enabled tools, with McGivern noting that HUB24, Netwealth and North are leading the pack in education, portfolio insights and transcription.
“It’s fascinating to watch the emergence of AI,” he says. “It’s safe to say that everybody is very focused on this space and we’re seeing some great initiatives that hopefully will come to market.”
Currently, about 5 per cent of advisers are using it, about one-third are beginning to dabble in it, and nearly half are interested but need more education and support, leaving only about 20 per cent who have no interest.
The research shows advisers are more gung-ho on AI than their support staff, but McGivern says the platforms are very good at bringing the support staff along for the ride by providing training and tools.
“What (advice firms) really want the platforms to be focused on is embedding AI capability and reporting, editing of advice, reports, research and modelling customer service and more around data analytics and practice management.”
The fourth trend – private markets – is being driven by rising investor demand, asset consultants seeking differentiation, and platform accessibility, with its evolution evident across the investment menu, reporting and education.
McGivern cites the examples of Netwealth’s partnership with the US alternative manager iCapital and BT Panorama with Preqin, the UK-based provider of financial data and information to the alternative assets industry, as concrete evidence of the growing importance of this market.
As he explains, the iCapital tie-up allows Netwealth to offers access to the alternative manager’s diversified menu of global private markets and hedge fund opportunities including equity, credit, real estate, infrastructure and hedge funds.
“It also provides access to a research portal with detailed information on each available investment including its due diligence information. In addition, it automates the subscription, administration, operational and reporting process for the life of the investment, as well as providing educational resources to complement research and due diligence materials to enhance clients’ understanding of the private markets,” he says.
