Second tier banks are increasingly looking to sever ties with their larger rivals in favour of independent investment platform providers, according to the chief executive of Melbourne based Powerwrap.

Tasmania's MyState Financial has signed a deal with Powerwrap to provide a new investment platform for its Financial Planning Trustees financial planning business, rather than use its incumbent provider Asgard, a Westpac subsidiary.

Using Praemium's proprietary technology, Powerwrap will provide a platform offering a wide range of investment alternatives and consolidated reporting under the MyState brand.

Andrew Varlamos, chief executive officer, Powerwrap, believes that there is a trend developing for second tier banks to seek independence from the "big five" as they develop technology to meet consumer demand for better investment solutions.

In November 2010 Bendigo and Adelaide Bank acquired a 24 per cent stake in Linear Asset Management, allowing it to deploy its own wealth management platform.

"If a platform is strategic to your whole wealth management business and strategic to how you deliver a holistic solution to your clients, how you sell your products and manage the customer relationship then you need to control your own platform," said Varlamos.

The new platform allows MyState, which has 200,000 customers, to provide a wider range of investment alternatives and consolidated reporting under its own brand.

"Our clients have told us they want a wider choice of investment outcomes, as well as greater transparency. Our new platform will enable us to get ahead of the competition with a more flexible, lower-cost offering," said John Gilbert, managing director, MyState.

Varlamos is very confident of doing similar partnership deals with other second tier banks in the near future and sees an opportunity for anyone in the industry that wants better technology and more independence.

"I think it's a great opportunity for any independent party, platform developers, financial advisers and fund managers and consumers to break the stranglehold of the big 5 institutions," said Varlamos.

"Why would any bank outside of the big five rely on their competitors to provide their platform? If it lies at the heart of their wealth management business why would they continue funding another banks balance sheet?" he questioned.

MyState's new platform will be branded as a MyState solution and include Tasmanian Perpetual Trustees managed investment products, MyState Financial Term Deposits, cash accounts and ASX-listed investments.

MyState currently has $771 million under advice.