1. The future of platforms
Presentation to Capstone Conference 2010
Nick Blue: Business Development Manager

2. Today’s agenda The history of platforms The current trends and issues
A timeline of the platform industry.
The current funds under advice (FUA) and flows analysis.
The current trends and issues
What will legislative change mean?
The future of wraps
What will the market look like?
What will platforms focus on?
What will this mean to Advisers?

3. The history of the platform market
Uptake share of net inflows
Next generation platforms launched
First non discretionary Mastertrusts
Baby platforms launched
First discretionary Mastertrusts
Wraps Launched
Super Wraps Launched
Early 1990’s
Mid 1990’s
2010
Oct 1997
Early 2000’s

4. The history of the platform market
March 2010
Market inflows
Market outflows
Market net flows
$ millions
Source: Plan for Life, QDS Admin, All Master Funds (competitors manually selected) – March 2010. 4

5. The history of the platform market
Wrap market FUA
BT Wrap % share of FUA
Source: Plan for Life, QDS Admin, All Master Funds (competitors manually selected) – March 2010. 5 5

6. The history of the platform market
Source: Plan for Life, QDS Admin, All Master Funds (competitors manually selected) – March 2010. 6 6

7. Current Issues/Trends - Legislative change
Impact on
Initiative
Description
Payments
Remove conflicted remuneration structures
Prospective banning of commissions and any form of payment relating to volume or sales targets
Percentage based fees can only be charged on un-geared products
Retail clients to annually renew (by opting in) to an adviser’s continued services
Product neutral adviser charging regime
Adviser duties and standards
Statutory fiduciary duty for advisers
Advisers to act in best interest of their clients, ahead of their own when providing advice
Removal of accountant’s exemption to allow advice on SMSFs
Review of professional standards
Advice and investor scope
Other
Expand provision of low cost simple advice
Distinction between sophisticated/unsophisticated investor to determine relevant financial service provider obligations
Source: ‘The future of financial advice’ information pack, Hon Chris Bowen MP 26/4/2010 7

8. Trends/Issues in the current platform market
They now make up 30.9% of all super assets $369b
There are 417,000 funds with 30,000 new funds being established each year
Only 50% of them are being advised on
SMSF assets have grown at 20% pa for the 10 years
The fee for service debate continues
Building a CVP for 2012
Expected change in structure of fee
Fee differential between SMSF and other investments
A move away from managed funds
A move to Exchange Traded Funds
A move to Dimensional Funds Management
Re-ignited emphasis placed on cash and term deposit solutions
Trends and Issues in
the platform market
Growth in SMSF’s
How Advisers charge
Cost of platforms
Investment Choice
Total cost to client
Aggregation of fees
Margin to dealer group
70% of advisers believe cost of managing equities on wrap is too expensive

9. Trend/Issue – Change in investment choices
Source: Investment Trends “Planner and Direct equities Report – June 2010” 9

10. Trend/Issue – growth in SMSF market
Source: Investor Trends SMSF Investor Report – May 2009

11. Trend/Issue – How Advisers charge
Source : Investor Trends – Planner Business Model Report September 2009 11

12. Trend/Issue – How Advisers charge
C-Wrap Statistics
Total BT Wrap Statistics
Source : BT Wrap – May 2010 12

13. The future of platforms
Issue
Item
Description #1
Regulatory change
Outcome of the reviews may be that scale rewards are banned.
Outcome of review may mean that margin made from badges may not be possible. #2
Competitor intensity
Competition will ↓Price, ↑ service and functionality.
It will also see continued entrants from new sophisticated providers.
Planner software diversifying their offering. #3
Focus on SMSF market
Platforms will look to capitalise on this growth segment and look to position to move more SMSF’ on platforms.
Platforms will continue to integrate with third parties involved in SMSF’s #4
Equities
Platforms will develop more sophisticated equity solutions to capture this growing market. #5
Retirement opportunity
Platforms will look to develop products to meet the needs of an aging population.
Platforms will look to capture more accumulators. #6
Integration
With accountants and their software.
With planning and risk software.
With stockbrokers (SMA’s) #7
Mass affluent segment
The mass affluent segment is large and attractive but platforms yet to target segment. #8
Self Service
Maintain client as key relationship but allow client access. 13

14. What will platforms focus on - SMSF
32% of SMSF are held in direct equities (30 June 2009)
Share allocation in portfolios expected to double of the next 5 years
More SMSF will move to drawdown phase
Equities
Cash and Term Deposits
Reporting
SMSF clients demand more sophisticated reporting
31% of SMSF Trustees said they would pay 2.5% for consolidated reporting
Intergration
SMA integration with brokers
Model portfolios with brokers
Linkage of wrap to accountants
Client access
26% of SMSF are held in Cash or Term Deposits (30 June 2009)
Logic
Commenced a 3 year transformation program in 2009
Delivered bulk trading, contra trading, improved corporate actions market information
Delivering model portfolios in September 2010
Scoping SMA capability in 2011
Delivered Cash notations in March 2010
Will deliver improved functionality in 2011
Implementing a CMA in 2011
Improved Term Deposit Maturity process – August 2010
Scoping consolidated reporting
Will provide tax parcelling from 1 July 2011
BGL data downloads
Scoping SMA’s
Improving tax statements
What is BT doing
Opportunity for advisers
Do you have a strong value proposition for equities ?
More than 50% of SMSF are unadvised
Administrative efficiencies
Opportunity to maintain revenue
Further improve your CVP
Ability to re-engage or improve referral relationships

15. Key messages of today
The platform industry is highly competitive, dominated by banks and moving through a period of rapid development.
The biggest issue in the platform industry is what will legislative change mean. This will have impact on the price of platforms, the investments adviser choose and how advisers charge their clients.
Wraps will focus on growth areas of SMSF, equities and retirement products going forward. 15