News

Business News

BNP Paribas eyes fund-agnostic SMSF wrap

The custody arm of financial services company BNP Paribas Australia and New Zealand, BNP Paribas Security Services, is considering the business case for establishing an investment platform for self-managed super funds (SMSF).

The platform would not be owned by a particular fund manager or bank, but would function as a portal that would allow SMSF trustees to invest across the full spectrum of asset classes.

BNP Paribas Securities Services managing director for Australia and New Zealand Peter Baker said such a platform would form a much more attractive proposition for the company than simply competing in the SMSF administration sector.

“I would certainly like to take a view whether BNP Paribas’ Australian business should be involved in the technology platform support of the SMSF world and then the underlying retail admin of it,” Baker said at a presentation on 24 June.

“I think it is a question that we need to ask ourselves over the next six months, whether we want to be part of it.”

But if BNP Paribas entered the SMSF industry, it would want to own the platform for which it provided administration services,” he said.

“Is there a willingness to give up the ownership of a platform or licence to someone else and then operate the platform?

“It really depends on the kind of model that we can put out to support that.

“If it is pure retail admin, it may or may not work, but if we actually have some input into the ownership of the platform, I think that is more compelling.”

BNP Paribas Securities Services chief administrative officer Daryl Crich said the platform would be similar to the direct investment options industry super funds had been developing, but without the links to a specific fund.

“[It would be] actually a wrap that is within the bounds of a superannuation structure, so you can buy all your own direct assets, you can buy direct cash. It is like a member direct option, but it is fund agnostic,” Crich said.

“You are leveraging the same capabilities and that is something where I think it could trend.”

He said he expected such a platform would particularly appeal to SMSFs that had relatively low account balances.

“If you look at SMSFs and the average balance … I think they are probably still sub-optimal for the cost to administer them,” he said.

Copyright © SMS Magazine 2024

ABN 43 564 725 109

Benchmark Media

Site design Red Cloud Digital