Nimble, independent and fast-growing wealth managers invariably become the victims of their own success.
As they attract more client funds they require greater efficiencies in order to do more with the same. Without the use of technology to assist, advisors run the risk of butter-spreading themselves too thinly, so to speak, and this means that offerings tend to revert to the mean.
In these days of volatility, uncertainty and pedestrian returns, investors are looking for tailored options to ensure they reach their investment targets.
“A one-size-fits-all investment model fits no-one properly,” says Mickey Gambale, CEO of investment platform INN8. “Wealth managers need the tools to fit clients’ needs, and one way to do this is through an independent technology driven platform.”
Gambale says research found that financial advisors want a technology partner that frees up time for them to focus on what they do best – advising their clients.
With this in mind, INN8 launched a Jersey-based offshore investment platform in May this year, and is preparing to launch a South African platform in 2019.
INN8’s offshore investment account provides a broad spectrum of offshore collective investment schemes across six currencies, with a transparent fee structure.
Gambale says platforms have transformed the investment landscape, simplifying administration and significantly increasing investment choice.
“At their core, many platforms are similar,” Gambale says. “Where we differ is that we launched our platform with purpose built technology, specifically aimed at independent wealth managers. We are unbiased, with no incentive to push a particular fund or product. We want to run a true open architecture platform so that we can give advisors access to all the tools to offer true independent advice.”
The platform has been built with independent, wealth-manager financial advisors in mind. It is based on global investment trends and focused on delivering international best practice benchmark platform services.
“What happens in a lot of the platforms is that they are not truly independent and they don’t give the choice and flexibility that investors want.”
Gambale says that with its offshore platform, INN8 has “brought the first purpose-built platform to South Africa”.
Seamless and elegant
“Platforms existing in our market have morphed from old unit trust or banking systems, whereas we have built from scratch. We partnered with technology providers for a purpose-built platform so that we get a tool that is the right tool. We are heavily tech-driven, and the result is a seamless and elegant system.
“There is straight-through processing, which is system-driven, as opposed to the traditional way of doing things where you would send off a buy instruction and wait for things to happen. We see our systems as the equivalent of using internet banking versus the days of having a bank book.”
Financial advisors are freed to advise clients and construct a financial plan for them. They then execute that plan through INN8’s platform, where they have flexibility and a broad range of funds available, Gambale says.
INN8 does not advise wealth managers on what their clients should buy but provides research tools and fund lists to help navigate the environment and offer data that supports the advisors’ investment selection process.
In the independent wealth segment, platforms have an important role to play in the future, says Gambale. “We have seen this playing out in the United Kingdom and Australia, where Retail Distribution Review (RDR) regulations on financial advice and distribution of financial products has led to the rise of platforms through their ability to assist with technology, improve transparency and ultimately bring access to the market for independent advice and wealth managers.
Platforms allow financial advisors to view and manage their client investments online. They can also provide investment planning tools and other services for advisor firms. For product providers, platforms provide administrative services and a means of distributing their products.
“Platforms are able to help you stay RDR-compliant and have the intrinsic capability to be able to deliver on your investment mandate, while tech and digitisation make it easier for advisors to meet the requirements of regulators,” says Gambale. “Treating Customers Fairly regulation becomes much easier through platforms where transparency, digital information and records can be stored to assist in meeting outcomes. All of these points help explain why independent platforms have taken off.”
He does not expect the growth in tech-enabled platforms to lead to the commoditisation of platforms all competing on price. “Platforms will have real value to add – value associated with convenience, value associated with support, value associated with accessibility – and you can charge a competitive market-related price for that.
“Our purpose is to change the way investments are done. You are going to see platforms expand their capabilities as they move from collective schemes to direct share investments, structured products, unlisted assets such as infrastructure or private equity and many more. We expect there to be a full suite of capability in one place, and this is only possible if the platform is independent.”
Brought to you by INN8.