Not sure where to put this as this impacts Netwealth, Praemium, HUB24, Pinnacle, GQG (less so as they have their own issues), Australian Ethical, and Macquarie. Essentially most large fund managers and the platforms.

For those not aware Macquarie were caught up in the Shield Masterfund fraud, specially for having the fund on their super/pension menu on Macquarie Wrap, where they are the responsible entity ( RE). They have agreed to compensate the investors who fell for the fraud. It’s just over $300M but apparently only be out of pocked about $100M after expected recoveries. Separately NWL and EQT have said it was fraud and are going to court over it saying it was not their wrong doing. I imagine Macquarie caved so as to not destroy their good will in retail banking where they are gaining a lot of market share and party as they have had multiple run ins over the last 2 years with the regulator for other wrong doings in other parts of the business. Sounds like ASIC pressured them into it despite it sounding like ASIC being asleep at the wheel about the fraud despite numerous whistleblowers.

In any case, word is Macquarie has overreacted and their platform, Macquarie Wrap, is looking to shove most fund managers off their super/pension menu. They are looking to reduce the range to 30 large global managers think PIMCO etc which have over $500B in FUM. The issue is most financial advisers use a wrap platform for choice, and ease of use. if you can’t construct a portfolio why use it, and if you do want a simplified investment menu why would you pay a full wrap platform fee when there’s cheaper alternatives. This is a radical change where they are removing something like 450 managers.

I imagine if it does happen, and appears it is, there will be mass outflows from Macquarie Wrap and the platforms will be gone in time. Not sure how much they have exactly but probably $300B or so. Not all of that will leave but a large chunk will. The winners as a result will be the other platforms like NWL and HUB. They will receive a greater share of new client money and also receive some currently on macquarie wrap that can move.

The fund managers though will suffer, like PNI. As i understand it the funds will just initially be soft closed meaning you can’t add funds to the removed funds. In time they will be removed completely from the platform. It is not a major issue but may be a short term impact as funds are moved to other platforms and then reinvested. Some clients with large capital gains can’t move and are likely stuck with the restricted menu moving forward. Pension has no CGT and investment is not impacted but super funds do have CGT and may be stuck to either pension phase or if an client/adviser does not want to move.

Anyway some changes going on and a lot of the find manager/platform/advice industry will be impacted - some positive and others negatively.