The Australian wealth management industry is likely to undergo further changes in 2018 as ASIC continues to enforce the best interests duty, writes Hub24’s Andrew Alcock.
Advice arms of institutions are coming to terms with their obligations under the best interests test and that's putting tension on the traditional way they've operated.
This is challenging the status quo and forcing them to think about their advice business models.
Just as we have seen with the choice of insurers on approved product lists, I think it's only a matter of time until most financial institutions open up their approved product lists to provide more choice and to ensure they can deliver on their advice obligations.
Non-institutionally aligned platforms offer a simple solution providing financial institutions with the offer of choice that investors need under the best practice requirements, and separating the provision of financial advice from the distribution of product.
Connectivity, value, openness and choice
These trends will deepen and further transform the wealth management industry. We also expect an increased focus on connectivity, value, openness and choice. The wealth and platform landscape is transforming.
Non-institutionally aligned advisers, brokers and accountants are increasingly leveraging new technology to improve client engagement, increase efficiency and reduce costs. They seek to integrate data and reporting functions for improved user experience and back-office efficiency.
Helping them connect data enables them to better advise their clients, create greater value and grow their business. Standing still is not an option and platform providers need to stay abreast of the latest technology developments.
Hub24, for example, has partnered with personal wealth platform myprosperity to enable its users to view their assets within their personal portal for a more complete view of their ‘whole of wealth’.
This enables advisers and accountants on both platforms to take a consolidated approach and transform the way they service customers by providing real-time, bespoke information to clients on their personal financial position.
By minimising time spent on administrative tasks and providing their clients a bespoke wealth portal powered by live data feeds, advisers can grow their digital brand and increase their revenues.
Technology has already lowered the cost of operation and improved efficiency for most planners, brokers and other providers, and enables them to better advise and respond to their clients’ needs.
Technology, especially open architecture, is key. It enables greater responsiveness to changing conditions, be it markets, business or regulation. We can meet advisers’ developing needs as well as those of their clients – and that is what this transformation is all about, empowering customers.
All this can translate into real, tangible benefits. For instance, enhanced functionality on platforms that can make a real difference to clients’ wealth accumulation over time – such as through tax modelling and tax optimisation tools.
Overall, 2018 looks like a good year for advisers, as platforms and their continued technology improvements help them better deliver advice to their clients.
Andrew Alcock is the managing director of Hub24.