“The children of today’s clients, who are inheriting the wealth, have different views about sustainability and impact,” Mr Greiner told The Australian Financial Review. “Where this investment will go is to make sure that we can meet those needs.”
He said JBWere had a growing customer base among entrepreneurs under 45, many of whom are self-made and hail from the booming technology sector. “They want to do more with their investments than just make money,” he said.
Part of the windfall will be allocated to bolstering the firm’s capability in what it calls “formalised advocacy”. That will allow it to aggregate client beliefs and values on responsible investing topics and influence asset managers and owners to produce customised products or outcomes.
For example, it might push for a version of a fund that removed exposure to tobacco or lobby a service provider to boost diversity on its investment committee on behalf of clients.
Gillian Gordon, JBWere’s head of alternative investments, said this kind of advocacy is the “next bastion” of environmental, social and governance investing.
“It’s beyond just the investment,” Ms Gordon said. “It’s actually mobilising the client voice, and giving the client a platform to be able to create positive change in companies and fund managers.”
ESG integration is now a non-negotiable for private wealth firms, she added.
While JBWere already has a mature responsible investing research process and already provides advocacy to clients on ESG issues on an individual basis, the tech expenditure will allow the firm to “aggregate the client voice” and articulate it through proxy voting and direct engagement with fund managers, Ms Gordon said.
A wider range of alternative asset classes, including private debt and equity, property and infrastructure, will be added to the platform.
Having spent a decade abroad, with roles at Standard Chartered Bank in Britain and in the Bank of Montreal’s capital markets business, Ms Gordon said she wanted to give Australian private wealth clients access to the kinds of alternative assets many rich individuals are invested in overseas.
“When I came back onshore, what I noticed was that alternative investments were … exclusively the realm in Australia of institutional clients,” she said.
“We wanted to democratise access to alternatives for our wholesale clients. And to do that, we had to build an institutional-grade platform where we deliver institutional-grade access and insight.”
The upgrade comes amid an increasing land grab in the $840 billion market for wealth platforms, used by financial advisers to manage assets on behalf of clients.
Speciality platform providers Hub24 and Netwealth have enjoyed spectacular share price growth, while Macquarie has spent “tens of millions” improving its Macquarie Wrap product and growing it to $100 billion in assets under management.
Private equity giant KKR has vowed to invest heavily in Commonwealth Bank’s wealth platforms after it takes a majority stake in the bank’s Colonial First State retail wealth arm.
But Mr Greiner ruled out selling the revamped platform on the open market. “This is all about enhancing the experience for JBWere clients,” he said.
Existing digital infrastructure of the Nabtrade retail share trading business will be integrated as part of the JBWere platform upgrade, including its mobile functionality and market data and research.
“We recognise that clients want advice delivered a little bit differently these days,” Mr Greiner said. “We’re going to use this money to really grow digital adoption.”
Digitisation will also create efficiencies in the workflow of JBWere’s investment advisers.
Mr Greiner estimated the time it takes to deliver advice to clients has blown out by 20-25 per cent in recent years under the weight of a raft of regulatory compliance requirements.