Products and Services
The Powerwrap Investment Account
The Powerwrap Investment Account is a single consolidated investment account offering custodial holdings for managed funds and SMAs, and non-custodial holdings of direct equities (Praemium VWrap) and Cash (Adelaide Bank CMA).
The structure provides a number of efficiencies for the management of investment portfolios:
1. Custodial holdings of managed funds and SMAs provides transactional efficiencies of pooling, without limiting flexibility or investor entitlements;
2. Direct held equities gives investors ultimate flexibility in corporate actions decisions relating to their portfolio; and
3. An integrated external cash facility offers superior transaction functionality, pricing and transparency to the typical pooled cash arrangements offered by master trust and wrap providers.
Full online functionality
The Powerwrap Investment Account offers a superior level of transaction, reporting and tax management functionality in comparison to the existing range of master trust and wrap account providers:
1. Online client account establishment;
2. Online transactions for managed funds and SMAs;
3. Direct equities trading through the adviser’s existing broker relationships;
4. Automated fees collection and reporting;
5. Consolidated online portfolio reporting across managed funds, SMAs and direct equities and cash, accessible by planners and their clients (valuations; performance; sector and security exposure);
6. Consolidated tax management and scenario analysis across the universe of investments:
a. Minimise gain;
b. First in First Out (FIFO);
c. Maximise gain; and
d. Optimise gain.
7. Integration with Australia’s leading SMSF accountancy software providers (BGL and Advanced Professional Services – “Desktop Super”) is designed to leverage Powerwrap’s core market of Praemium Ltd’s self managed super funds.
Product structure efficiencies
The Powerwrap Investment Account is structured as a Managed Investment Scheme (“MIS”). Unlike the IDPS structure that supports the majority of investment administration platforms, the MIS structure offers a significant and valuable point of differentiation (from other master trust and wrap providers, structured as IDPS or IDPS-like schemes) by supporting the financial planner with practice efficiencies, compliance and risk management controls.
Within the MIS structure, financial planners can implement portfolio decisions through model portfolio functionality:
1. Decisions are implemented once at a macro or business level, rather than many times over at individual client portfolio level. Significant time savings are achieved.
2. The adviser achieves a superior level of consistency in the way that investment decisions are implemented across their client base. This is a significant factor in reducing advice risk.
3. As any changes to the underlying securities are made within the product, there is no Statement of Advice event associated with the changes, as the product forms the basis of recommendation rather than the underlying composition of assets within the product. This eliminates a significant administration burden associated with the production of Statements of Advice or Statements of Additional Advice.
4. By implementing model portfolios within the product structure, the planner is able to diversify their revenue base by earning asset management fees associated with model construction.
5. Powerwrap monitors portfolio construction through its investment committee to ensure that investment decisions are based on appropriate process and trading controls, the adviser benefits from additional compliance risk controls. The planner benefits from an increased level of external due diligence associated with their investment portfolios.
Higly competitive & transparent pricing
The Australian market is highly price sensitive to investment administration fees. Pricing forms a key element of market acceptance, business volume and the ability to transition existing assets from higher cost platforms.
The Powerwrap Investment Account is one of the most competitively and transparently priced platforms in the Australian market. This is an advantage in a market where the regulators are likely to enforce lower fees and greater transparency:
1. The Powerwrap investment administration fee is only charged across managed funds and SMAs and not direct holdings of equities and cash.
2. For managed funds and SMAs, Powerwrap’s investment administration fee is between 30bps – 40 bps, or approximately 50% less than the fees charged by competitors across the typical range of account values serviced by financial planners.
3. Direct equities holdings are charged (Praemium’s current price of) $240 per annum, while cash holdings earn Adelaide Bank’s standard retail interest rate.
4. Low administration fees on managed funds and SMAs, combined with segregated pricing for equities and cash delivers price efficiency to advisers and investors that is unmatched in the Australian Industry.