Without a platform
Investment platforms guide
Introduction
Like an investment supermarket, a platform gives you access to a broad list of investment products offered through many different retail fund managers at wholesale prices.
Many people choose to invest through a platform to gain access to a range of shares and managed investments, usually at wholesale prices.
If you'd like more information, talk to your financial adviser. If you don't have an adviser, we can help you find one.
What is a platform?
Platforms (variously labelled as 'wraps'), master trusts or investor directed portfolio services (IDPSs) are all designed for one purpose: to simplify the administration, management and reporting of the increasingly complex portfolios investors are accumulating.
Essentially, platforms are administration facilities for investment and superannuation money. They simplify the investment process because they consolidate all the investment reporting and administration for you, and send you regular portfolio valuations and tax statements.
With a platform
Benefits of the platforms
Some of the benefits of platforms include:
Choice
A platform will give you access to a range of investments across all of the major asset classes - shares, property, cash and fixed interest. Depending on the product you choose, you may have anything from a limited choice of managed funds, right up to a choice of hundreds of managed funds, shares and cash options.
Flexibility
You're in control of where your money is invested, and with your financial adviser, you can create the financial strategy that's best suited to your financial needs and goals.
Reporting
One major difference between investing through a platform and investing directly is the comprehensive and consolidated reporting provided. You can have 15 managed funds and 15 share investments yet receive just one regular report detailing and summarising all of your financial information. This is particularly useful when it comes to calculating your tax. Your capital gains tax liabilities and your franking credits will be consolidated and calculated for you.
Wholesale prices
Investing through a platform often allows you access to a range of wholesale managed investments that are not available to investors with less than $100,000 to invest.
Online access
Most platforms also give you online access to your account, so you can see how your portfolio is performing and access other information 24/7.
The benefits of diversification
Diversifying your investments means spreading them around. Many people invest across each of the main asset classes (shares, property, cash and fixed interest), and also invest in a number of securities within each asset class. By placing your money across a number of different asset classes and investments, the good returns you receive from one investment can offset any negative returns from another. The graph below shows how a balanced portfolio can smooth your investment return.
The line is the return you would have received had you invested in a basket of all the asset classes rather than any particular one. The highs and lows have been smoothed out along the way, providing you with a more consistent return.
Having a variety of shares can smooth your investment return
Annual asset class performance to June
A brief history of platforms
Platforms arose out of a need to simplify the investment process for investors and advisers alike. Previously, diversifying by investing in multiple retail managed investments involved large volumes of paperwork. You completed multiple application forms, multiple reports, capital gains and other taxes were difficult to calculate, and the whole process was extremely unwieldy.
Platforms reduce your administrative burden so you and your financial adviser have more time to concentrate on helping you realise your goals (rather than completing excess paperwork).
Important information
This information was prepared by Asgard Capital Management Limited ABN 92 009 279 592 AFSL 240695. To the extent permitted by law, no liability is accepted for loss or damage as a result of reliance on this information. The investment information or general advice provided in this publication does not take into account any person's personal objectives, financial situation or needs and because of that a person should consider the appropriateness of the information or advice having regard to these factors. In deciding whether to open, or to continue to hold, an Asgard Account, you should consider the relevant Product Disclosure Statement or Financial Services Guide for that account issued by Asgard. Copies can be obtained from Asgard or a financial adviser.