How has OneVue evolved from its starting point?
OneVue is the result of an amalgamation of businesses that had a combined history of more than four decades of providing services to the wealth management industry.
It actually started with an installed unit registry system, and that’s still a key part of our business.
It’s evolved into four client segments and two verticals… fund services and platform services. Fund services is the unit registry business; we have the platform business, which along with a planner and accountant solution also has a self-directed solution that is branded by third parties to the members or consumers, and includes both retail super and SMSF services. There’s a CEO which runs each of those verticals within OneVue.
Is your client base mostly comprised of advisers or self-directed investors?
One is slower, incremental, deeper growth, the advisers; the other is growing rapidly, self-directed, but this is always through a third-party brand. The fund services business has almost 300B in a combination of installed software and total outsourcing to investment managers, trustees and custodians.
The platform has about 2.5B of wholesale and retail combined. The interesting thing about the platform services vertical is the interaction between the self-directed and advisers. If you accept that self-directed does not mean 'do it yourself', but that the client has control over when, on what basis and with who they engage, what has resulted from this mind shift is that fastest growing part of the digital vertical, the self-directed solution, is actually being driven by dealer groups that we deal with. They are seeing the self-directed as an opportunity to identify genuine advice opportunities.
You deal with a lot of self-directed investors through third parties. What portion of those are SMSFs?
The majority are, about 70 per cent. In fact, between 60 and 70 per cent of our whole business are [SMSFs]. Now that we also own a retail superannuation business via the MAP acquisition, that proportion is changing rapidly,
It has [been increasing]. It’s really part of the popularity of self-managed super funds, but I think, as well, more and more people are looking at a greater breadth of assets to put [in] an SMSF.
It used to be managed funds, occasionally listed securities. Now we have managed funds, listed securities, separately managed accounts, property [and] collectibles.
What kind of demand has the growth of SMSFs put on your business?
Most of us have come from large institutions, so the one thing we’ve done is scale up early… we can take millions of hits on the website. The scalability issue has not been a problem to date but I have learned to never be too sure of anything.
I think that the main issue for us has probably been dealing with the customer interface; in other words, sales. Because as people get used to something new it needs to be quite intense at the front end, especially at the adviser interface. So that’s probably been the most challenging point, whereas in most organisations it’s the back office.
In fact we’re in the process of increasing the sales team and deepening the relationship management team.
How has OneVue responded to the growth in the SMSF sector in recent years?
For us, it hasn’t been 'respond', it’s been more 'initiate'. We’ve been really ahead of the curve on the self-directed and the SMSF client base, and therefore we took some initiative assuming that there would be growth, so I don’t think we’ve really responded to it as much as we’ve put things in place a while ago for what we saw would be an inevitability. We have further enhanced our offering with the recent acquisition of SMSF Managers.
We [see that growth continuing], particularly with the younger demographic. Even though the X and Y generations don’t necessarily have the balance to start with, they’re also the generations now that have known nothing other than compulsory superannuation.
How has OneVue dealt with the regulatory change in superannuation and financial services?
When we think that change is inevitable, we get ready to find a way to turn it into a strategic advantage instead of a liability to our firm.
Whether it’s [the Future of Financial Advice reforms], or the introduction of mFund, or the changing operating models in the business, we’ve made choices that are in many instances just as hard for us to make, but we’ve made them because we think it is the right direction for the industry.
I think that it is very easy to preserve the status quo, because it’s incredibly uncomfortable to evolve your business model or to change. We’ve accepted that you can either lead change, or it can drag you with it.
Do you think parts of the traditional platform infrastructure need to be challenged?
I think the fee upon fee upon fee upon fee [really] needs to be unbundled. Manufacturing versus advice, versus [reporting]… it’s all bundled into one fee and therefore it lacks transparency through to the consumer and frankly sometimes even through to the adviser.
We’ve tackled it internally, but until mFund, transaction cost could not be seen in isolation. But the reality is that what the ASX will force upon the industry is the disaggregation of bundled costs at a platform level.
Why do you think that SMSFs haven’t been keen adopters of platforms?
Because the SMSF world doesn’t stop with listed securities and managed funds. It’s much broader than that and I think that they’re also fee-conscious, but not in an absolute sense, just in terms of the value that they’re getting.
At the moment if you’re an SMSF investor, keeping some assets on-platform and some assets off-platform… it just doesn’t make sense if you look at it broadly, and that’s probably one of the reasons we’ve had rapid growth in that area, is that you can hold any assets on the platform, and therefore you can have it all in one place, and I think that is increasingly important. Investor behaviour has already changed; we are just all scrambling to catch up.
Has OneVue shifted its focus in the superannuation market?
In platform services we are still very much focused on superannuation.
Are you open to further acquisitions?
We are always looking for value-adding acquisitions.