Shift from vertical integration has further to run

Mike Taylor

Managing Editor/Publisher, Financial Newswire

30 November 2022

The shift in market share from vertically integrated financial services business has further to run, according to publicly-listed platform provider, Praemium.

In an address to the company’s annual general meeting, Praemium chief executive, Anthony Wamsteker, attributed the rise of challenger investment platform such as Praemium to the exit of the banks.

“The structure of the industry used to reward vertically integrated business models. Now it rewards independence,” he said.

“Both factors contribute to superior outcomes of the consumers of platform services – financial advisers and their clients,” he said. “We believe the shift in market share has further to run and we plan our business activities accordingly.”

Praemium’s chair, Barry Lewin, had earlier told the AGM that the sale of the company’s international operations to Morningstar would allow Praemium to focus on what he described as an enormous opportunity at home.

He said that the original investment in the international business had been made on the assumption that the international opportunity was at least as large as that in Australia.

However he said that this had not been the case and had proved an ongoing drag on cashflow and profitability.