Platform providers are scrambling to bring their portfolio technology up to speed with the opt-in component of the Labor government’s planned financial services reforms, with one provider aiming to unveil an offering in the second half of the year.
Most platform providers said they were awaiting more clarity around opt-in, which, if passed into law, would require clients to formally renew relationships with advisers by signing fresh agreements every two years.
Colonial First State (CFS) is exploring ways to help advisers minimise the disruption related to the reforms, but is concerned over complexity and cost.
“If the opt-in process is implemented as announced, we would like simplification of the administration requirements and details required in the prescribed notice, including an extension of the proposed 30-day grace period,” CFS general manager of product and investment services Alan Kenny said.
CFS runs FirstChoice, which had $47.7 billion under administration as of the end of calendar 2010.
“We expect that most of the major platform providers would offer some support for opt-in if introduced,” Kenny said.
Opt-in is one of the most contentious components of Financial Services and Superannuation Minister Bill Shorten’s Future of Financial Advice (FOFA) reform package unveiled in late April.
BT Wrap head Chris Freeman said the platform wanted a seamless transition for advisers and their clients ahead of FOFA.
“The new opt-in framework is a critical component of this,” Freeman said.
“We believe platforms have an important role in supporting the industry’s move to the new opt-in regime potentially through our technology infrastructure and service and support teams.”
He said BT Wrap wanted more clarity on opt-in and how it might be implemented.
“However, we have already started to engage our adviser and dealer group partners to understand the role platforms could play in the process and how we could support them. To this end, it’s critical we involve them in the solution design process,” he said.
BT Wrap had about $42 billion under administration as of 30 April 2011.
National Australia Bank-owned wealth manager MLC said it was exploring all options and Macquarie Bank said it was looking at an opt-in component but did not yet have details.
Praemium chief executive Arthur Naoumidis said the company planned to incorporate an opt-in function into its platform in the second half of this year.
“Being a technology company, we can really assist our clients in facilitating opt-in. It isn’t the big impost that everyone thinks it is,” Naoumidis said.
He said Praemium, which has about $46 billion in funds under administration, planned to offer the function later this year and would not charge for it.
“Clearly, at the end of the day, the more service we give to our clients, the more clients we win,” he said.
“I’d imagine everyone is going to be doing this.”
