Pinned straw:
I am in the midst of (finally) taking stock of my NWL position. I blindly followed MF Pro’s direction to open the position back in 2018, understood the thesis, sort of understood what it was about, but never deep dived until now. It is now my 2nd largest IRL position at 10%+ and 2nd largest winner - living proof that the coffee can investment approach does work, particularly if the company was picked by the great MF Pro combo of Joe & Matt.
After deep diving the financials, I struggled to clearly understand the products. So I signed up for a product demo last week through the NWL website to better understand the Personal Investor products, as I did also want to explore what was available (and at what cost) vs my current eSuperfund SMSF setup. Here are my notes, of both the SMSF-related products, as well as my takeaways from a “better understand NWL” perspective. A lot of the points should be intuitive, but having the conversation and the ability to ask questions made a huge difference to the understanding.
What I understood, the chart of the key NWL platform metrics at the end of this post and what I thought was an excellent article by A Rich Life’s Patrick Poke sums up why the MF Pro pick of NWL was an outstanding one and why I should absolutely stay invested with a high portfolio allocation.
OVERVIEW OF THE PERSONAL INVESTOR PRODUCTS
THE SALES ENGAGEMENT PROCESS
- The Sales Team response’s to website enquiries - appears to be within 3 business days, which is comforting
- The Sales rep spent 45 mins talking me through the products, pricing and despite my hesitation in product suitability, continued to offer a demo - this desire to take me through the product was good - if I was not clear on what I am after, the demo would have got me
FINANCIAL ADVISOR FOCUS
- 96-97% of NWL customers operate through Financial Advisors
- Each financial advisor has its own “platform” within the NWL platform:
- Tailored functionality
- Tailored screens, reports
- Each client of the advisor has their own login to the Advisors “platform”
FEE/COST STRUCTURE
The explanation of the cost structure and the mechanism in which it is calculated (daily snapshot, averaged then x days in month) helped bring to life how the Funds Under Administration Market Movement metric, what broadly makes up the various NWL revenue lines - Administration Fees, Ancillary Feels, Transaction Fees, Management Fees, and how both these numbers will rise and fall based on how the market moves.
It also provides clues as to where and why NWL still requires a reasonable labour force.
WHAT ATTRACTS NEW CLIENTS INTO NWL
The Sales Rep commented that what attracts new clients into NWL:
- Financial Advisors - once a Financial Advisor comes onboard, their clients come onboard as well
- Detailed real-time and EOFY investment reports from the platform is a key attraction for SMSF customers who focus on the investing side rather than SMSF Administration
- Clients who want access to a range of investment options that they self-manage, without the hassles of running the SMSF administration (Super Accelerator)
HOW DOES IT COMPARE WITH ESUPERFUND
It will cost me at least 3x the eSuperfund annual fee to get:
- base Wealth Accelerator
- the “equivalent” SMSF compliance service that eSuperfund provides
- Significantly better investment information/data/performance/dashboards to manage the SMSF’s investment
- Cost will vary based on the daily balance of the Fund
- Cost will also rise further if the SMSF has off-platform or non-custodial assets
A non-starter if you are able/willing to invest time in managing the SMSF admin on a day-to-day basis.
NWL PLATFORM GROWTH SINCE FY2021
Discl: Held IRL
I’ve never used NWL, so I can’t really comment on them, but I also use eSuperFund and I’ve found it to be a great platform if you’re looking to go down the SMSF path. It’s really affordable, and while you do need to do a bit of the work yourself, I’d say the time commitment is pretty minimal.
(I hope this comes across the right way…) but if you’re not up for that little bit of work, then maybe an SMSF isn’t the best option anyway. Just to be clear, I don’t mean that in a rude or condescending way, it’s just that SMSFs aren’t for everyone. If doing a bit of admin sounds like too much, you’re probably better off with another setup.
I guess there are so many options out there in how to structure your investments because everyone has a different approach to their investing journey. Finding the right one for you might take a bit of effort (kind of like researching companies), but that time investment is totally worth it, and honestly, pretty important.
@jcmleng , echoing your comments on Netwealth’s customer service. I looked into their super products in early 2023 and had multiple questions. Each time, I received detailed responses within a day, which really impressed me. Based on my customer interactions, I thought I should look at NWL as an investment, but never got around to it.
From my experience, DIY investors seem to be more of an add-on to their main client base of financial advisers using the platform. I was strongly encouraged to use Netwealth through a financial adviser, which I suppose is part of their duty of care.
Ultimately, it was the higher fees that put me off.
With new super products from Pearler and Stockspot, there are now good alternatives for people who want more control and a simple portfolio, without moving to a full SMSF. That said, I doubt these new products will have much impact on Netwealth’s core customer base.
Also, if you are unaware, Matt Heine has a podcast called “Between Meetings with Matt Heine.” It’s not specifically about NWL, but it does give some useful insights into the industry at times.