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(December-2003) Fees to topple off platforms
The move by industry superannuation funds into the corporate fund outsourcing arena has been a major factor in injecting much-needed competition into the platforms market, according to a panel of some of Australia’s most senior funds management executives.
Panel member, Credit Suisse Asset Management managing director, Brian Thomas, says a number of factors will drive down costs associated with platforms, including the increasing involvement of industry funds. “As industry funds move into the master trust space, costs will be driven down,” he says.
The panel, made up of Thomas, the managing director of DST International, Ian Mathieson, director of brillent!, Graham Rich, director of GHR Accounting, Brian Hrnjak, vice-president of JPMorgan, Graeme Arnott, head of global sales marketing and strategy with National Custodian Services, Patrick Liddy, the CEO of RBC Global Services, Phillip Hope, the CEO of Skandia, Ross Laidlaw, and former Sealcorp CEO, Ian Knox, broadly agreed that master trusts had become too much a part of an offering.
For his part, Brillient!’s Rich says there needs to be greater recognition of the fact that mega-platforms already exist in Australia in the form of the four big banks and AMP.
What is more, he says there also needs to be an understanding that 70 per cent to 90 per cent of the inflows were being processed through the banks and AMP, and around 90 per cent of the money was staying within those networks.
“They are not so much platforms as fly traps,” he says.
However, National Custodian Services’ Liddy argues that notwithstanding the dominance of the banks, changing technology will see greater levels of access.
Knox adds that healthy competition will be a primary driver for reduced costs along with an open access regime.
However, he says he would like to see a separation of advice from the platforms environment in circumstances where platforms have simply become a part of the offering.
AUTHOR
Zilla Efrat
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