Fees prompt advisers to manage assets off-platform

Almost a quarter of client portfolios are being managed off-platform, according to Investment Trends, as a way of avoiding high platform fees.  

Research commissioned by Praemium with Investment Trends data found 59% of advisers were administering a portion of portfolios off-platform. This included for term deposits, Australian Securities and Investments Commission (ASX) listed shares, exchange traded funds, commercial property and private equity holdings.  

The top reasons planners chose to do this was because platform admin fees were too high as a percentage of assets, certain assets were unavailable on platforms, and clients wanted to retain a level of control.  

However, the downside of holding assets off-platform was that they spent almost twice as much time collating information for reporting compared to for assets held on platforms and only reported to clients twice a year on average.  

The average number of platforms used by advisers was 2.6, the highest since 2017. 

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Praemium chief commercial officer, Mat Walker, said: “There is a strong desire to shift this reporting burden to a technology solution and be able to administer and report on 100% of a client’s assets and wealth. 

“Planners perceive they need to use multiple platforms to satisfy client best interests. However, they aspire to have one platform that can deliver to all client segments, catering for all forms of managed accounts and investments, including custodial and non-custodial assets.”