The Australian Securities Exchange's new AQUA II platform has received a mixed reception from financial institutions. On this week's Wealth Professional TV we speak to Matt Lawler of Yellow Brick Road and Connie McKeage of OneVue for their opinions.
Video transcript below:
Anna Temple: The Australian Securities Exchange’s new AQUA II platform has received a mixed reception from financial institutions. Connie McKeage of One Vue argues that institutions who don’t support the platform clearly don’t have the interest of the wider investment community in mind.
Connie McKeage, OneVue
Connie McKeage: And they are trying to hang on to their revenue. I understand it, it’s the best thing for them to do in the short term as an institution, but it’s absolutely wrong for the industry and for the customer. We don’t have that vested interest. We made a decision a long time ago that we would embrace change if it was in the best interest of the organisation and the sector longer term and in our view, there is no doubt that is the case, because it’s the beginning of the unbundling of the value proposition of the platforms in the same way that the advisors and the rest of the sector had to justify their value proposition.
Anna Temple: Matt Lawler of Yellow Brick Road thinks AQUA II is a revolutionary move and will aid advisors to be more competitive.
Matt Lawler, Yellow Brick Road
Matt Lawler: Yeah, it’s one of the great innovations that we have seen out of the industry for some time. I think if an industry doesn’t have a lot of innovation and we are seeing a lot of consolidation in the marketplace, so it’s good to see some innovation that drives competition, it drives alternatives for consumers, it gives advisors alternatives as well. I think overall the pricing for [Master Trust] and RAP accounts which are still sitting at above 2% when you include advice and at the extreme level you are seeing some cost to clients of over 3%, which is in a low return environment, it’s just going to be too high. So we see anything that actually brings that price down to below 2% probably more to around 1 ½% when you include advice is going to be really critical for us to continue to be competitive and continue to be a good choice for clients to come and see.
Anna Temple: McKeage argues that the benefits of AQUA II could be even more far reaching.
Connie McKeage: If we get more people investing, through a better operating model, the same way that the online brokers came into the market, you know in the early 2000s, late 1999s, they changed the behaviours that more people got involved in looking after their money and how can that be bad when more Australians start taking a real interest in their money, because it starts becoming more affordable to invest, there’s more transparency in the market and then all that leaves is reporting and you can’t justify a lot of the existing models and the amount that they are charging for what’s left, which is reporting and we are the strong advocates of unbundling reporting as a separate thing.
Anna Temple: This is Anna Temple reporting for Wealth Professional Online.