What July's ProductRex Modelling Data Tells Us About Adviser Confidence
The ProductRex modelling data from July provides some interesting insights. However, I suspect it highlights more adviser anxiety than any real understanding of what’s on the horizon. What we're seeing in platform selections and product flows seems to mirror the economic headwinds that everyone's discussing. The question is whether advisers are being proactive or just reactive.
Defensive Moves or Smart Positioning?
Fixed-income products are clearly having a moment in adviser portfolios. The Vanguard Australian Fixed Interest Index, Macquarie Dynamic Bond, and Daintree Core Income Trust all feature prominently in the data over July. This could be savvy risk management ahead of a potential US hard landing, or it might simply reflect advisers scrambling to find yield in an uncertain rate environment.
The RBA's decision to hold rates in July caught plenty of people off guard. I've been hearing from advisers who feel like they're flying blind on monetary policy direction. When you can't predict where rates are heading, parking some client money in fixed income starts looking sensible rather than defensive.
What's worth noting is how quickly this shift happened. Six months ago, these same advisers were loading up on growth assets. The speed of this repositioning suggests either impressive market timing or, more likely, a collective case of nerves.
The ETF Story Continues
ETF dominance in adviser selections hardly qualifies as news anymore. Vanguard, BetaShares, and iShares products keep showing up in the top selections, which probably reflects client pressure on fees more than any love affair with passive investing.
The Australian ETF market hitting $280 billion tells us something important about where client expectations have landed. When bank stocks get ditched in favour of ETFs, as we saw in the first half of 2025, advisers are responding to client behaviour rather than driving it. Global X's new low-cost Australian equity ETF launch seems perfectly timed for this environment.
Sustainable investing products like the Lonsec Sustainable Managed Portfolios and BetaShares Ethical Model Portfolio are getting more attention in monthly flows. The government's new labelling regime for sustainable products probably helped. However, I suspect some advisers are still figuring out what their clients actually want versus what they think they should want.
Platform Winners and Losers
HUB24 and Netwealth continue their march up the platform rankings, which shouldn't surprise anyone who's been watching the consolidation play out. Both platforms posted record FUA and net flows for the financial year. Industry projections have them overtaking Insignia Financial soon, though I'd be curious to see how realistic those timelines actually are.
AMP North's presence in the top-10 platform rankings represents something of a comeback story. Their superannuation business recording positive net cash flows for the first time since 2017 suggests their repositioning efforts may actually be working. Whether this represents a sustainable turnaround or a temporary reprieve remains to be seen.
The platform consolidation story isn't finished yet. Advisers are clearly voting with their feet (or client assets), moving toward platforms that offer operational efficiency and reasonable pricing. The question is how much more consolidation the market can absorb before choice becomes genuinely limited.
The Private Markets Gap
Here's what I find curious about the data: while news reports highlight significant investor interest in private credit and unlisted assets, this movement doesn't show up prominently in the ProductRex numbers. BlackRock, Metrics Credit Partners, and Escala Partners are all expanding their alternative offerings, but adviser core portfolios seem focused on liquid, listed solutions.
This gap might indicate that private market adoption in mainstream advice is in its early stages. Or it could suggest that these products are concentrated in specialist high-net-worth segments that don't appear in broader platform data. Either way, there's a disconnect worth exploring between what the industry talks about and what advisers actually implement for typical clients.
What This Means Going Forward
The alignment between adviser positioning and economic conditions suggests the profession is reading market signals reasonably well. Whether they're acting on these signals effectively is another question entirely.
The continued emphasis on low-cost, efficient solutions through leading platforms tells us something important about where the advice industry has landed. Cost consciousness isn't going away, and operational efficiency has become table stakes rather than a competitive advantage.
I suspect we're seeing advisers adapt to an environment where client expectations around fees, transparency, and performance have permanently shifted. The platforms and products winning market share are those that recognise this reality rather than fighting it.
The real test will be how well these positioning decisions serve clients when markets eventually turn. Defensive positioning makes sense when volatility is high, but it needs to evolve as conditions change. The advisers who get this balance right will likely be the ones building sustainable practices for the long term.
The profession's ability to synthesise economic signals, regulatory requirements, and client needs into practical portfolio outcomes suggests we've moved beyond simple product selection. That's progress, even if the current environment makes everyone feel less confident about the path ahead.
Note: The modelling from our ProductRex software, which advisers use to compare products and model portfolios when developing advice, is consistently used by over 6,500 active users, representing more than a third of the profession. While usage highlights its strong presence in the IFA sector, benefiting platforms like HUB24 and Netwealth, all licensee types and practice sizes are included in the usage data.
