In today’s current climate, every effort should be made to provide clients with transparency. The reality is that many fee structures remain unnecessarily complex, particularly in the platform space.
Recent questions raised about the competitiveness of the BT Panorama platform illustrate this point. While BT’s recent fee cuts made headlines, research from Bell Potter suggested the platform remains “price uncompetitive” for accounts with low balances.
Professional Planner covered this report and BT’s response. According to the article, “the research highlighted that hidden fees are a factor in Panorama’s comparatively poor performance” and that “BT separates the $80-a-year cost recovery fee from the asset-based administration fee, while other platforms generally include it”.
BT disagreed with some of the analysis in the report and countered that “the lower client fund balances used in the comparison aren’t relevant to a full wrap offer”. And while that may be the case, this situation highlights how difficult it would be for the average investor to calculate and compare costs across different platforms.
Adding to this complexity are the fees layered on by advisors and custodians, and the second of these two is not always necessary. This is one argument for using a HIN hosted platform. It immediately removes the need for custody unless it is legally required, meaning investors don’t incur unnecessary costs.
Of course there are other benefits of HIN hosted platforms, and they could become increasingly attractive as investors seek out value and transparency.