Platforms should adopt insto approach
Thursday, 20 November 2008 10:05am
Platforms should adopt an institutional approach to product selection, rather than merely responding to short-term trends, said Bruce Murphy executive director, distribution, Macquarie Funds Group.
Murphy said the bear market would likely lead to a change in platform behaviour - one that is based on an institutional approach to investing.
This can be achieved by players taking responsibility for the outcomes and aligning their interests with their clients' long-term investment benefits, he said.
"The shift that will have to occur is to a much less commercially oriented choice about what goes into the platform."
For example, platforms should not be driven by pure outright returns or an "immediate" demand focus on products flagged by advisers, but rather adopt a more institutional approach to their product choices.
"In many cases the platform does not necessarily have trustee type obligations. But the reality is, as more and more products are added onto platforms, some of these [products] might have problems and may have long term impacts on clients.
"I think this puts an even higher onus on financial advisers and to a certain extent, platforms, to be careful about being too responsive to short term fads," said Murphy.
Ruth Liew
