Managed portfolios, prepared meals and future innovation

By: Brett Mennie, Head of Managed Portfolios, HUB24

At their core, supermarkets and distribution platforms are very similar, where managed portfolios are akin to the prepared meals found in supermarkets.

According to HUB24’s Director of Strategy Development, Jason Entwistle, both the supermarket and platforms have developed with the same goal in mind – the efficient and low-cost delivery of goods and services.

“Platforms’ core role is the delivery of intellectual property from fund managers in the most efficient way. Managed funds are an example of this, but they are now 100 years old.”

Speaking in a HUB24 webinar which I chaired titled ‘Masterclass with HUB24’s Jason Entwistle on the future of Technology, Platforms and Managed Portfolios’, I asked Jason to draw on his 30-year history in the platform industry to offer some fresh insights on the platform space.

He said managed portfolios had effectively un-bundled the managed fund model to provide investors with the benefits associated with accessing the underlying assets, such as reducing the number of parties and costs involved and delivering a much better customer experience via transparency and efficiencies.

However, they have also progressed beyond what managed funds could provide because they have technology at their core. Entwistle said it is this structure and the radical and rapid technology change that we have seen over the past 30 years, that is creating a watershed moment in history.

“We are staring into the transformation of advice and we will make more progress in the next five years than we have in the previous 30 years.”

With technology sitting at the heart of managed portfolios, what can we expect from them going forward?

While the potential of artificial intelligence and machine learning are still being imagined, Entwistle said great inroads have been made with engagement tools and self-service advice.

“Digital is a way to push forward for people who can’t afford the full advice service.” But he said, there is also the need for individualisation of the advice experience.

“Managed funds are a very blunt instrument. Managed accounts and managed portfolios increasingly can customise or consider circumstances which leads to a better client result.”

Given the similarities between supermarkets and platforms as distribution platforms, Entwistle said just as Coles or Woolworths are rich sources of data, platforms also need to mobilise this capability.

Together with Agility, who is a particularly large data provider in the broking industry, HUB24 is currently working to garner unstructured data so it can be structured and interrogated, further assisting in the digitisation of practices.   

“We are leveraging the data aggregation ability of Agility with HUB24’s capability to build on relationships and engagement with advisers.”

It is this area of data integration which Entwistle said will offer the advice industry the next breakthrough. HUBConnect is using the integration of data to provide access to accurate client data from multiple sources to create advisers with a consolidated view of wealth.

However, despite this progress and innovation, Entwistle said digitising advice will never replace advisers.

 “We are not interested in a digital advice journey that is not backed by an adviser. When clients are making the decision to hand over cash, people want to be able to ring someone they trust and check it is ok. It is rare that trust will be replaced by robo.”

HUB24 is working with Aberdeen Standard Investments to deliver bionic advice, as distinct from robo advice.

“We describe it as bionic advice because you can opt out and talk to someone at any time.”

Did you miss our Webinar?

In this webinar, Jason Entwistle offers insights on the important role technology plays in an increasingly competitive space where financial advisers are looking for continued practice efficiencies and service delivery excellence.

Watch the webinar here.

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