Australian financial advice firms can now reach a new generation of clients

Australian financial advice firms can now reach a new generation of clients

Financial advice firms now have a simple and cost-effective way to reach and help the mass market of Australians priced out of personal financial advice – the so-called “advice gap” – a solution that promises to give more Australians access to professionally managed investment portfolios.

Melbourne-based investment platform OpenInvest has launched its new OpenWealth service, an online solution through which financial advisers can provide access to their investment portfolios and keep clients up to date and informed not only on how their portfolio is being managed but also on a range of important financial wellbeing issues.

The launch of OpenWealth is timely: increased regulatory obligations imposed on financial advisers means the cost of traditional ongoing personal advice services has gone up dramatically in recent years, and large numbers of advisers have exited the industry, making it harder for advisers to service some long-standing clients and leaving many clients now unadvised.

Just as importantly, it means advisers are finding it increasingly difficult to attract a new generation of clients to the ongoing personal advice model.

Via the OpenWealth platform, the technology does the heavy lifting, empowering consumers to choose and sign up to a managed portfolio and, thereafter, to maintain an ongoing engagement with their portfolio manager – via technology. This means costs are brought down to a level that opens up access to all Australians.


The early adopters

Hamilton Wealth Partners is one of a number of firms that have signed up to the launch of the OpenWealth service. Managing Partner Will Hamilton sees it as an important solution for his business.

“We needed a cost-effective way to serve the next generation of clients, those whose wealth isn’t  – yet – at a level that justifies the cost of our traditional bespoke service,” Hamilton explains.

“We have been doing podcasts and have a YouTube channel, all part of a deliberate strategy of reaching out to this broader audience, however, we needed a technology platform that allowed us to offer digital access to our investment portfolios and a scalable means for us to build engagement with those who sign up.”

Hamilton, winner of the 2020 ifa Excellence Award – Individual, believes the OpenWealth service can help wealth management and advice firms grow their businesses.

“The existing wealth management business model works extremely well – for those who have already built up decent levels of investable assets. But, until now, the industry hasn’t really had a cost-effective solution that enables us to help those at much earlier stages of their investing journeys.”

Another leading wealth management firm that has signed up to the OpenWealth solution is Sydney-based Wentworth Securities.

Founder Thomas Schoenmaker understands that Australia’s sophisticated and wholesale investors have a range of top quality firms from which to choose, yet there are many more Australians who would like to access experienced investment professionals – if the pricing model allowed it.

“Everyone has to start somewhere, including those whose parents may well be experienced and successful long-term investors,” Schoenmaker says.

“There’s a substantial cohort of Australians who would like to invest for the long term, with help from professionals, but who need an easier and lower-cost way to get started.

“The next generation of investors expects to be able to do everything online, anyway, so a digital solution is the logical way for the industry to reach and serve these clients.

“OpenWealth gives us the means to reach many more clients, delivering our intellectual property at scale, in an informative and engaging way.”


OpenWealth makes it simple

Andrew Varlamos, Co-Founder and CEO of OpenInvest, the company behind OpenWealth, has been delighted by the early response from the industry.

“The reaction from leading wealth management firms has been extremely positive,” Varlamos says.

“What I find most exciting is that they all have a broader mission beyond simply growing their businesses. These firms have tremendous experience and want to be able to help a wider audience – to put it bluntly, to help more than those who are already wealthy. Yet until now, they have had to regularly turn away people, simply because the economics of the traditional approach required it.

“Now, using OpenWealth, they can serve an entirely new cohort, distributing and being paid for their intellectual property, in a cost-effective way.”


Investing + Education

Varlamos is cognisant of the current environment in which young Australians – like their counterparts in other countries – have signed up to online share and crypto trading sites in significant numbers.

“I take particular personal satisfaction in enabling experienced wealth management firms to take their investing approach and wisdom out to young Australians, who are currently being bombarded with online advertising telling them that trading is fun and that easy profits are just a few clicks away.

“We have designed OpenWealth so that firms are not only managing portfolios but providing valuable financial education as well,” Varlamos said. Will Hamilton agrees with the importance of financial education.

“At Hamilton Wealth Partners we like to think long term, which for us means also thinking about our clients’ children and grandchildren. It’s about more than just managing an investment portfolio today – we want to help our clients ensure that their hard-earned wealth is protected as it passes down to subsequent generations.

“OpenWealth allows us to communicate important lessons to the next generation now, helping them to understand the right way to think about long-term, sensible investing. And that means properly diversified investment portfolios, not trading.”