new! introducing praemium SMARTwrap

We are very excited with the launch of Praemium SMARTwrap, our low cost wrap solution that will help advisers to transition their business from commission to fee-for-service.

Praemium’s V-Wrap has been the portfolio administration platform of choice for hundreds of fee-for-service financial advisers, accountants, planners, brokers and SMSF administrators for 9 years, and this system currently administers approximately $40 billion.

We pioneered highly functional SMA technology in 2006, and last year demonstrated our scalability even further by producing hundreds of thousands of tax reports for one of Australia’s leading discount brokers.

We then turned our attention to the wrap platform market and a new entrant, Powerwrap, to provide our technology and offer a price and functionality solution to advisers and their clients.

With the proposed changes to the delivery and remuneration structure of financial advice recently announced, we believe the timing is right to introduce Praemium SMARTwrap.

Praemium SMARTwrap offers a transitional solution for moving planning businesses from commission to fee-for- service and an ongoing low cost alternative to the mainstream wrap platforms. Here are a few of the exciting features of Praemium SMARTwrap:

'Factory Gate' price of 32 bps, tiering down, for managed funds;
A rebate of up to 50 bps which is added to the ‘Factory Gate’ price and can be switched off when required by changes to the law or your business practice;
Over 650 wholesale managed funds to choose from which, can be expanded with custodian approval;
Seamless link to Praemium’s V-Wrap portfolios administering ASX-listed securities for a low flat fee;
Superior ‘accountant-strength’ consolidated investment and tax reporting – providing the opportunity for advisers to provide their clients with consolidated reporting across both managed funds and other investments under the adviser firms branding;
Web access for your advisers, staff and clients via your website or using V-Wrap Investor and/or V-Wrap Adviser; and so much more.

The Product Disclosure Statement (PDS) for the Praemium SMARTwrap Scheme (which is the component of the SMARTwrap Investments that enables the delivery of managed funds) will be available in early August 2010.

If you would like to access a presentation about Praemium SMARTwrap that was given by our Group CEO, Mr Arthur Naoumidis, at our recent Future of Financial Advice Roadshow, please go to http://www.praemium.com.au/the-future-of-financial-advice.html

For further information or to discuss your requirements please contact your State Manager on 1800 702 488.

why is it so important to get your pricing right?

This is an article by Sue Viskovic, who is the Managing Director of Elixir Consulting, and author of Pricing Advice – Creating the Right Fee Model for Your Financial Planning Business. As experts in the field of practice development, Elixir Consulting provide regular articles to assist our clients with issues that affect their businesses. From time to time, Praemium clients may be provided special offers and opportunities from Elixir Consulting.

There are many advisers around Australia that have been charging fees for their advice for years. A large percentage of these would consider themselves to have a ‘hybrid’ business model – they still receive commissions from some clients and/or some products. Many of these advisers also tell us that they didn’t use a great deal of science to create their fee model, and feel that they haven’t yet “got it right”.

The recent Adviser Sentiment survey by Wealth Insights found that more than half (53%) of the advisers surveyed anticipated that the proposed ‘Future of Financial Advice’ reforms would result in a decrease in their business revenue from July 2012.

I’d like to say that these advisers are wrong, that fear is clouding their judgement, but if a practice does not act early enough to transition to fees, and if they don’t get their pricing model right, there is a very real risk that they will suffer a drop in profit. The extent of that loss will depend largely upon the state of their practice and what percentage of their revenue is currently derived from trail commissions from clients that are not actively serviced.

Consider for a moment, the typical segmentation model used in advice practices. Most businesses have segmented their client base and have allocated them a classification depending on revenue. For illustration purposes, let’s say you’ve used A, B, C, D. The D clients (and often the C’s) are usually people for whom you are receiving trails that are not substantial enough to pay for a regular structured review service, so they have a transactional relationship with the adviser - they can get in touch when they need to and you will help them if and when they seek your help. In reality, many of these people are not clients at all – they are customers who had a need at some stage in the past, and you filled that need with a product – they did not want financial advice, and despite your best efforts, they have not extended their relationship with you any further.

Click here to read the full article. To purchase a copy of Sue Viskovic’s recently launched Pricing Advice book, visit http://elixirconsulting.com.au/pages/Pricing-Advice-Book.html .

new locations for help documents and templates

In response to your feedback and to minimise confusion, all help documents, interface help sheets and upload templates are now available from within V-Wrap Online Help. These documents are no longer available from the ‘Get Help’ and 'Downloads' pages of our website.

Please refer to Setting Up The Service> Service Uploads> Downloads Application Interfaces for links to these documents. Or run a Search in the Help section for the document you are looking for.

The Financial Year End document is also now available from the Tax and Corporate Actions section of the V-Wrap Online Help.

Upload templates are accessible and can be downloaded directly from the relevant V-Wrap screens. For example, the Cash Book upload template can be accessed by clicking Upload on the Cash Book screen. Broker letters and our credit card payment authority form will remain under the 'Downloads' page of our website.

A message has been sent out to Level 12 users regarding these changes. Please ensure that all users in your service who need to use these documents and templates are notified of these changes. For more information, please contact the Client Service Team via email at mail@praemium.com.au .

webinar – term deposits, bank bills and fixed interest securities

Please join Sean Crisp, our Client Service Manager at Praemium, as he provides the group online training (webinar) on how V-Wrap administers term deposits, bank bills and fixed interest securities.

Date: Thursday, 26 August 2010 Time: 11 am - 11.45 am

There is no charge to attend our webinar service, however, you must register. To register for this session, click here.

business partner profile – RIMsec

Praemium’s fixed interest information provider, RIMsec, provides end-of-day pricing for more than 325 bonds. We thought you might like to know a little bit more about them, and asked them to provide some information:

About RIMsec

RIM Securities Ltd ("RIMsec") is an ASIC licensed specialist fixed interest securities dealer. RIMsec has been in the Australian market since 2004, and is one of the few fixed interest brokers dedicated to servicing fixed interest markets. As a specialist fixed income dealer RIMsec offers solutions to wholesale and retail investors providing easy access to a wide range of Australian bonds.

Fixed Interest

RIMsec sources investment products through direct investments, primary securities issues and the secondary securities markets. They currently have access to a wide range of offerings, including all primary and secondary fixed interest stock on offer in the wholesale market, along with access to individual and corporate clients who hold a considerable amount of stock (for offer) in their own portfolios. This places them in the enviable position of being able to provide not only an “in market” broking service (for stock that is common to the whole market), but also being able to provide a “search service” where they can locate specific stock that you may require.

Regular Fixed Interest Summary – “While You Were Sleeping”

RIMsec's regular reports and market information will keep you informed of important events and flows allowing better insight into a very important asset class. Their overnight market summary, While You Were Sleeping, is a one page report covering major overseas bond activity, important domestic rates, and includes a 3 month outlook.

Term Deposits

RIMsec believes in an active style of cash management, providing access to the best rates available from 50+ ADI’s, on behalf of the investor. They also leverage the Financial Claims Scheme when designing large term deposit / cash portfolios, minimising your risk and offering highly competitive yields. RIMsec’s suite of analytics includes margin and spread analysis to help pinpoint the best yield / term for your clients’ investments.

Portfolio and Execution Services

RIMsec also offers specialist guidance on fixed income portfolio construction to sophisticated investors, high net worth individuals, and financial advisors. RIMsec can also help investors seeking to add to / sell existing fixed interest securities and help investors looking to replace a recently matured security through our extensive network and access to a range of fixed interest securities.

Please contact Hector Ortiz at RIMsec – email: hortiz@rimsec.com or phone: (07) 3020 3000) - for a discussion on fixed interest or to subscribe to one or all of the following:

RIMsec Term Deposit Rate Sheet
While You Were Sleeping – Overnight Bond Summary
Fixed Interest Bonds

other upcoming events

Heffron SMSF Training Day 2010

Due to popular demand, Heffron SMSF Training Day will be held in more cities in August 2010.

Lead by Meg Heffron, SMSF panel member from the Cooper Review, the full-day training session has been designed to meet the needs of professionals who require a more advanced knowledge of self managed superannuation funds (SMSFs).

To register, please click here.

recent announcements & in the press

In case you missed the following recent announcements from Praemium or articles in the press, you can read it by clicking the link below:

Disclaimer: The information in this publication is of a general nature. While Præmium Limited and its related bodies (‘Præmium') endeavour to provide accurate and timely information Præmium does not guarantee that the information in this publication is accurate at the date it is received or that it will continue to be accurate in the future. Views expressed by contributors and/or services described which are provided by third parties are not necessarily endorsed by Præmium. No responsibility is accepted by Præmium for the accuracy of that information, and Præmium in no way takes any responsibility whatsoever for material contained on external websites referred to in this publication.

Issue 32 30 July 2010