Strong outlook for Challenger platforms

The outlook for Challenger platforms will remain strong as net fund flows favour the non-aligned platforms, according to Powerwrap’s chief executive, Will Davidson.

The platform, which offered a range of alternative investments, has an average portfolio of around $1.4 million each, with more than 435,000 high net worth investors in Australia who were responsible for $1.72 trillion in investable assets.

Funds under administration (FUA) increased 22 per cent between FY17 and FY18 to $7.8 billion, as of the end of September quarter.

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According to Davidson, headwinds from the Royal Commission’s scrutiny of the vertically integrated wealth management business model had the potential to drive growth of non-bank platform providers.

“Net funds flows are clearly favouring the challengers and this is likely to continue,” he added.

Davidson also said that the turnkey services were particularly attractive to advisers looking to set up more independent operations.

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