Standard & Poors to review master trusts
Standard and Poor’s(S&P) has begun a ratings system for master trusts and wrap accounts after today releasing details of its latest research product, the Master Trust Evaluation.
The Master Trust Evaluation will review key areas of master trust and wrap platforms, and then assign a ranking of extremely strong, very strong, strong, satisfactory or weak.
“Master trusts and wraps are a rapidly growing sector of the funds industry. I think there is a lot of straight information on the platform and provider but we wanted to look at a broader range of issues to what has been done before, and look at the operational and analytical capabilities of the provider and platform,” S&P’s Fund Services director David Collins says.
The six areas S&P will review will be business profile and financial position, management quality, operational and information technology capability, product offerings, fee structures and compliance and legal capability.
According to Collins, the analysis of the business profile and financial position is particularly important in reviewing the core capabilities of a platform, and evaluating its sustainability in the future.
On completion of the information gathering, meetings, analysis and evaluation process, a report on the platform will be made available on the S&P Web site for anyone from financial planners to individual investors, at no charge.
“The S&P business model will be to charge the master trust provider for the evaluation,” Collins says.
Collins says S&P has already received a level of interest in its evaluation process.
“We believe there is a gap in the market for a qualitative review and have spoken to some of the big managers and there is a fair bit of interest. We think this will be a valuable service, not just for financial planners but also for fund managers,” he says.
“Fund managers will be able to gain an independent insight into the capabilities of the master trust provider in the distribution of their products. Also, master trust providers themselves will benefit from the evaluation as it will provide them with an objective evaluation of their services, enabling them to make peer comparisonS&Promote their services to potential clients.”
Recommended for you
With an advice M&A deal taking around six months to enact, two experts have shared their tips on how buyers and sellers can avoid “deal fatigue” and prevent potential deals from collapsing.
Several financial advisers have been shortlisted in the ninth annual Women in Finance Awards 2025, to be held on 14 November.
Digital advice tools are on the rise, but licensees will need to ensure they still meet adviser obligations or potentially risk a class action if clients lose money from a rogue algorithm.
Shaw and Partners has merged with Sydney wealth manager Kennedy Partners Wealth, while Ord Minnett has hired a private wealth adviser from Morgan Stanley.
