In the mature wrap and platform market in Australia a number of key players have amassed large scale and dominant market share after many years of technology development and investment, built up over years of industry development and change.
Throughout all these years of evolution, there have been some constants. Advisors demand more ease of use, continuous improvement in online functionality, easier navigation of the desktop. On top of these enduring needs, the industry has had to contend with an ever changing regulatory environment, particularly the impacts of FOFA, Stronger Super, SuperStream and APES.
This more demanding regulatory and competitive environment has made it more and more important for advisors to stay connected to their clients. FOFA has amplified the need to understand clients and to provide a high level of ongoing service with better client reporting processes, better looking reports, best of breed CRM, and so on. In addition, FOFA has brought about a requirement for the distribution of annual Fee Disclosure Statements and new opt-in processes. Advisors need to be better able to demonstrate the value of their advice.
The current growth in SMSFs highlights the imperative for advisors to tailor their services to different client segments. Advisors need the traditional support that platform providers have always offered to help them manage the developing requirements of their SMSF clients, as well as new technology solutions to deliver administration tools to the client. Keep in mind that platforms have historically been designed for an intermediated market, and do not at present meet the administrative needs of single clients. Similarly, while the provision of scaled advice is envisaged in the FOFA world, advisors need the tools to be able to reduce the cost of advice to be able to cost effectively deliver scaled advice, and then investors need the tools to effectively self-service thereafter. Again, traditional platform technology does not immediately offer the solution for this new client segment.
Platform providers have always had their hands full maintaining and developing their platforms to ensure minimum standards of regulatory compliance, as well as enhancement of their systems to meet advisors’ needs. In fact, these days many platform providers would now describe themselves as technology providers, rather than service suppliers.
But this doesn’t change the fact that advisors need so much more from platform providers than just a technology solution. Advisors look to providers for thought leadership, quality content and marketing materials for clients, help with problem solving, client education and training, CRM systems and advice, BDM support, and the list goes on. Thorough understanding of advisors’ needs is a vital component of the relationship between a platform provider and advisor groups.
Technology no longer acts as a barrier to entry for new entrants in the wrap and platform industry. New platform providers have access to cost effective, modern, tailored technology that allows them move nimbly and with agility, unencumbered by the legacy systems of many of the established competitors. Combining both the technical and functional imperatives advisers demand.
Witness the rapid growth of industry funds, and stay tuned as they expand their product range in to the wider range of financial services. This will challenge the market share of the current major players.
In an environment where advisors’ needs for their businesses are evolving rapidly in many directions, new entrants have the ability to focus on those needs, with technology which supports rather than inhibits creative solutions and fast responses.
Technology is the key to unfold the new map of the wealth management industry.