The ASIC report into death benefit claims revealing the devastating impact of poor industry practices on grieving Australians has again highlighted the pressing need for change. While some funds have taken up the cudgels, others are still playing hardball on improving their service offering.
A Retirement Income Covenant obligation notwithstanding, there is still a paucity of these complex products on offer. The Advice Through Superannuation draft legislation might offer a way forward.
Powerwrap downsizes. It doesn’t look good
The wholesale investment platform Powerwrap, which uses Praemium technology, has let go all of its sales and marketing team. The firm has also let go two junior sales people who hadn’t actually joined the company, but were contracted to do so. Will Davidson, the managing director of the listed company, did not return a contact call last week.
Powerwrap is chaired by Anthony Wamsteker, who is well known in the institutional investment community as the first chief executive of what became ME Bank. Powerwrap’s board also boasts several senior industry people. But the big issue is that Praemium bought 11 per cent of the company. And the company now has no sales staff. It doesn’t look good.
The big loss in the sales area was Wes Gillett, a highly regarded wholesale marketer. Several others followed, including Julian de Cresgipny, the head of customer service and sales. The other big issue is that Powerwrap Ltd still has about $17 million in cash, according to ASX figures as of last month. It’s clearly a company in play. Not that Praemium is particularly well heeled to take it over. The cash is both an attraction and a problem.
Wes Gillett was reluctant to talk last week, but he did say that Powerwrap was more of an adminstration company than a “platform”. He believes that Preamium’s purchase of 11 per cent is a “blocking” stake which will allow it to take over Powerwrap more easily.
One wonders what it will be taking over.
– G.B.
