Frequently asked questions

What is it?

A market intelligence platform to better understand where money is moving and why across the wealth management industry in Australia. It captures investment, product and issuer trends across all investment types, covering on-platform and off-platform flows in a timely manner. This is represented through net-sales data, complemented with gross inflows and gross outflows.

Who is it for?

In the first instance, this is targeted at various personas in the investment management industry, more specifically investment product issuers who are looking for ways to better serve the needs of advisers and their clients in a highly dynamic and competitive financial product market. Understanding flows in a timely and dynamic manner allows product issuers to track the effectiveness and refine their product, distribution and marketing strategy through to the advice market

Given the nature of the data, we will eventually leverage this foundational capability as a means to serve value-add datasets back through to the financial advice market.

What problem does it solve?

We find that much of the wealth management industry continues to rely upon stale and disparate sources of information to forge a view of product and investment trends in a highly dynamic market. Either spending too much time on data management, or relying too heavily on sparse industry surveys and anecdotal evidence to formulate an investment product and distribution strategy. Without robust intelligence, the market tends to take a “best guess” approach to satisfying the needs of advisors and their investors, without an awareness of some of the prevalent blind spots that could be a source of opportunity or a threat for the business.

Does it capture all industry flows?

No. This squarely focuses on the advised assets in wealth management. Any institutional flows / mandates or direct consumer transactions are not captured. Within the advised segment, we capture over $130b* in annual transaction turnover across nearly 10,000 unique investments, covering a significant share of the market. This representation will continue to expand over time as we ingest more data.

The total transaction volume and value will continue to increase over time as Iress achieves completeness of coverage across underlying client segments.

Is it an accurate representation of wealth management flows?

The data is derived from a well distributed cross section of the market to alleviate any prevalent gaps or biases. The underlying segments cover the key sources of flows, such as dealer groups, IFAs, private wealth and service brokers ensuring that each underlying segment is well represented.

It is a highly statistically significant representation of investment decisions in the wealth management industry that is delivered in one centralised source in a timely manner.

Where does the data come from?

The data is derived from Xplan, Iress’ market leading advice software, which is an integral to managing the financial advice journey between an advisor and their client. Iress’ dominant and market leading position in Wealth management with Xplan means that it captures the source of investment decisions from over 600 of the leading wealth management businesses in the Australian market, including top tier dealer groups, private wealth, service brokers and IFAs.

How is it that you can accurately capture transactions?

Within Xplan there is a module known as “IPS” (Iress Portfolio System) which is a portfolio administration tool used to construct, manage, review and analyse a portfolio on behalf of advice clients. Therefore we are able to capture discrete investment decisions from the source, without encountering some of the issues that typically arise with flows data (such as double counting and impacts from distributions / corporate actions).

What about data quality?

The data is checked and validated periodically across multiple dimensions before it is released to production. The validation occurs at the source to identify any anomalies and outliers relative to the patterns observed across segments and time series analysis for underlying investment flows. We also reconcile transactions through other related data variables in Xplan as part of the validation process.

How timely is the data?

The data is generally available within a week of month-end, with data updated monthly. While the data is updated monthly, it does carry with it daily transactions from which we can conduct more sophisticated and granular time-series analysis for our clients.

What investments does it cover?

All investment types that would find its way into an advice client portfolio, including any off-platform holdings. All together, 10,000 different underlying investments are captured, across Managed Funds, ETFs, SMAs and Direct Stock allocations (domestic and international).

What information do you have on SMAs?

We cover over 1000 SMAs and track the dlows across each of the issuers of SMAs, as well as a look-through into transactions within SMAs. Understanding the flows via SMAs is of critical importance to fund managers and ETF issuers as this is becoming a significant source of flows for them.

Can I see the direct source of the flows from an Adviser?

No. All data is anonymised and aggregated and cannot be reverse-engineered, so as to protect the privacy and confidentiality of the underlying input data in Xplan. However, the source of the flows can be attributed to broadly defined client categories as part of the first phase of the launch of this product:

• Top-tier dealer groups (100+ advisers)
• IFAs
• Private Wealth
• Service Brokers
• Boutique Dealer Groups

What can we expect to see in near term subsequent phases?

As a natural next step we will work on a more narrow segmentation of the adviser profiles described above, which will also include geographic attribution of flows and advice practice profiles. In addition to this, the overall positions data will be added to complement the transaction flows so that market share data can complement the buy/sell activity.

For each of the investment instruments we will also be releasing a taxonomy to better classify investment products across each of the asset classes.

How is this different from existing flows data?

This is a comprehensive understanding of flows across all issuers and product types, derived from the source of the investment decision that is presented on a highly interactive dashboard. Other flows datasets are often compiled with significant lag from multiple registries or platforms to form a view, or aim to algorithmically explain the flows from high level self-reported net asset valuations.

Unlike other sources, we are able establish full lineage and reconciliation of transactions from underlying investor segments through to final product destination across all product types, including across and within the fast-growing SMA segment. Given the multiple dimensions of data that we can work with, our clients can engage with our platform in a more dynamic manner to extract the answers that are critical to their business.