Netwealth to tap growing HNW demand

Netwealth is looking to take advantage of growing demand among high net-worth and private wealth investors for sophisticated platform offerings, with plans afoot for the launch of a premium product within months.

The $28 billion platform is set to launch a new "Premium" offering within its flagship accelerator range for high-net worth, private wealth and sophisticated investors, as it continues its shift towards a user-pays model.

Speaking to Financial Standard, Netwealth managing director Matt Heine said the platform was focused on ensuring it had a range of user-pays options available on the platform, from those suited for "low sophistication" investors to more intricate offerings for the likes of high-net worth clients.

"With all the change going on in the industry at the moment and a real focus on best interest, we've been very focused on moving towards more of a user-pays model when it comes to building the platform and the different product options available," Heine told Financial Standard.

Heine said a big part of that is ensuring that a solution exists for clients with simple needs looking for a lower cost product.

"And at the other end of the extreme where we're working increasingly with high net worth and private wealth groups, that we're able to offer a range of services that aren't generally available in the industry, such as bonds, international trading with multi-currency trading, and IM funds," he added.

Heine said it was important for Netwealth to be able to offer a specific product for wholesale investors who need "global access and more sophisticated portfolio construction", especially as the interest in a more sophisticated offering continues to grow among the platform's clients.

A number of Netwealth's product solutions have been offered on an ad-hoc basis in the past, with different clients taking single aspects to suit their needs, he added.

"This is the first time that they'll be packaged up and sold as a stand-alone product stream," Heine said.

"And certainly as our success in the high-net worth and private clients space continues to grow, we see the product being a really important part of our feature set."

Heine emphasised it was important for the platform to continue its shift towards a user-pays model to ensure lower-balanced clients no longer subsidised their wealthier contemporaries.

"This makes it very clear that the services and the products that they're accessing have got a fee attached to them and that's commensurate with what they're actually getting as opposed to it being cross subsidised across the different client segments," he said.

The introduction of the Premium option comes as Netwealth undertakes a "major" product update for its wealth and super accelerator businesses, which includes the introduction of Xwrap as a software-as-a-service product, to cater for non-custodial, off-platform investments. Heine said SaaS revenue for Xwrap is now being collected.

In a quarterly business updated released this week, Netwealth posted record funds under administration for the December quarter, raking in an additional $2.9 billion to take its total beyond $28 billion.

Read more: NetwealthPremiumFinancial StandardXwrapMatt Heine
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