Formany, the build up to the Financial Services Reform Act (FSRA) March deadline bears a striking similarity to all the hype that preceeded Y2K.
On the eve of the millennium, a large number of individuals were holed up in home-made ‘end of the world’ bomb shelters in fear that Armageddon was upon them.
In the case of FSRA, while Armageddon may not ensue post-March 11, for the majority of financial services organisations and professionals it is widely acknowledged that its impact will be far reaching.
However, one area in which the effect of FSRA will be limited is the back-office, saysInvestment Data Technologies(IDT) head of design Norm Bulmer.
“From what I’ve seen, there hasn’t been that much impact on what we do as a result of FSRA. The main forced change we’ve seen is to some elements of reporting, in particular, disclosure reporting. But these changes aren’t monumental. It’s really more a case of reporting in greater detail and being clearer on what clients are paying in fees,” Bulmer says.
“The feedback we’ve got from our dealers has been limited at this stage to a change in the format of a couple of reports and also some additional input in order to be more specific about who an adviser is and what his authorities are.”
Melbourne-basedObjectmasterydirector John Rundle agrees with Bulmer that FSRA’s biggest impact on back-office solutions is predominantly in the area of disclosure.
“We haven’t yet come across any major need to change our products in order to accommodate FSRA. The Act is more about making improvements to disclosure to customers at the front end,” Rundle says.
Bulmer says dealer groups and advisers need to focus on their administration systems more than their back-office systems, so that advisers do not exceed their authority in providing advice to clients.
“The thing that’s probably going to have to change most is the office systems that financial planners use, such as how they record their contact with clients and the format and content of their reporting,” Bulmer says.
However, atXplan Technologies, national sales and marketing manager Jason Huong says the group has changed its Centrepiece financial planning software product in order to reduce its own potential liabilities under FSRA.
“We knew it [FSRA] was coming down the track, so in order to meet the FSRA requirements, the client can tailor the software themselves in order to do so. We don’t want to be responsible for everything and with this the dealer group is liable for anything that may go wrong,” Huong says.
