Speaking to InvestorDaily, Rubik Financial head of COIN Wayne Wilson said financial planning organisations are grappling with integrating the various data feeds that are required to build fee disclosure statements (FDSs) into their back office.
Some of the institutions that use the COIN software are well on the way to integrating their back-office sources of data that relate to fees and commissions, said Mr Wilson.
But at the far end of the spectrum, there are practices that are completely non-integrated, practices that have to go through each FDS manually and find the information required for each document, he said.
Big institutions often “pull information from dozens of sources for one client”, said Mr Wilson – and COIN is working on a solution that will make their FDS creation relatively seamless.
“Until we’ve solved that for our clients, this kind of thing could affect the way people provide product recommendations,” he said.
“Planners aren’t going to want to recommend stuff where they’ve got to go off to 20 different sources every time they have to do an FDS.”
If planners decide against a software solution to the problem, it could change the way planners structure their portfolios – and that would be a threat to platforms in general, he said.
“They’ll start to seek out products and services where there’s no fee. So they’ll go straight to the ASX, or use exchange traded funds or term deposits,” said Mr Wilson.
Direct investment has been on the rise since the onset of the global financial crisis, he said, and only a new bull run will encourage planners and their clients to return to managed funds.
“FOFA could be just the next sort of step along the line that pulls money away from platforms in that space – depending on how advisers act,” said Mr Wilson.
