A new platform has launched offering advisers and clients the opportunity to hold investments themselves.
FinClear today launched its HIN Platform, which uses the Holder Identification Number (HIN) of end investors to hold investments, rather than the custodial wrap model employed by many Australian platforms.
The firm said its new "alternative" offering would offer advisers and clients lower fees, and zero-brokerage.
FinClear chair David Hancock said the discussion around fees in wealth management would eventually move from the current fees-for-no-service scandals plaguing advice to "incidental" or platform fees. He said clients were suffering high fees at the hands of platform providers but weren't receiving much in return.
"End clients are being charged exorbitant amounts for essentially technology-enabled reporting capabilities that make advisers' work easier but provide little value to the end investor," Hancock said.
FinClear's solution is to allow advisers to hold clients' investments in their unique HIN, which was implemented following the 1987 stock market crisis to give Australian investors individual ownership of their shares
Despite the HIN's development, the wrap model still succeeded by offering investors the convenient packaging and reporting benefits.
"The price for convenience has been high, with fees up to 2% of their total portfolio, and major portability issues if they want to move off a platform."
Hancock said the progression of technology now makes those benefits attainable outside of the wrap model.
"We're now at a point where at least 90%, if not 100%, of a regular investor's diversity needs can be met by listed products, and technology has progressed to the point we can provide the same packaging and reporting benefits as traditional platforms without using an expensive, fee layered custodial model," he said.
The fintech recently made a raft of appointments to support its growth, and confirming it experienced headcount growth of 120% over the last 12 months.