“Some [wraps] don’t even allow investors to buy stock using cash from sales until the sale settles, that’s difficult to explain to savvy clients,” he said.

“Wraps also lack the necessary modeling tools and capabilities to enable advisers to trade efficiently on behalf of clients while achieving greater scalability and practice efficiency."

“These are the reasons why many sophisticated clients and SMSFs don’t use traditional platforms,” he added.

Mr Macchia said advisers who deal with SMSFs know their clients want greater control, customisation, transparency and flexibility and want to minimise costs as they approach retirement.

“Platform providers have been painfully slow to meet the demands of advisers and the burgeoning SMSF market, which held over 60 per cent of assets in direct shares and cash as at 31 December 2013,” he said.

“In many ways, traditional platforms make little sense, with alternative options such as managed discretionary accounts providing advisers with a new scalable, efficient and cost effective avenue,” he added.

If you would like to keep up to date with the latest developments in the platform industry, Sterling Publishing, publishers of SMSF Adviser, will be hosting the 14th annual Wraps, Platforms & Masterfunds Conference in the Hunter Valley this September. Click here for more details.