BT Portfolio Serviceshas rolled out a low cost wrap vehicle aimed at lower-net-worth retail investors, with a limited range of investments and reduced fees. The roll out increases the competition in this end of the market currently occupied byColonial First StateFirst Choice andING’s One Answer.
The new product, Wrap Essentials, works off the back of the existing BT Private Label wrap and is the first major change to the platform in nearly two years, when it was repackaged for offering to third party advisory groups as BT Wrap.
The BT wrap platform is already in use by 32 groups and has recently been rolled out to Westpac advisers, boosting take up numbers of the platform to about 3,500.
BT porfolio services general manager Mark Smith says while the product will be offered in the same space as Colonial’s First Choice and ING’s One Answer products, it differs in that it is an extension of an existing product and not a new vehicle.
“We want to cover the full range of product choice and target lower-net-worth clients with this product,” Smith says.
To offer the product to the lower end of the market, BT has reduced the number of investment options to an initial 23 and has made those options exclusive to the Wrap Essentials service.
Of the 23 funds available, the management of 16 has been outsourced to third party managers, with BT using InTech for the selection of managers in the growth, balanced and conservative portfolios off the back of its recently launched Partner series. The wrap will also offer a cash account, which provides the cash option.
Smith says the funds accessed by the low cost wraps will differ from the mainstream wrap service in that they will be retail versions of wholesale funds and as such work through a retail fee structure.
The new wrap will be offered to all existing users of the BT wrap platform, with the exception of Westpac advisers who are still undergoing the full roll out of the mainstream service.
