Speaking at an Institute of Managed Account Professionals (IMAP) webinar, DASH (formally WealthO2) chief executive, Andrew Whelan, explained the cost-saving benefits of integrating end-to-end technology solutions into an advice practice.
Whelan overlayed a KPMG paper with the Financial Services Council’s map detailing financial advice creation, highlighting the potential savings from using end-to-end software solutions.
He said that while he agreed red tape was part of the problem, technology would be the ultimate solution.
“On the software side, frustrating for me personally, and to our team here, is the KPMG’s assessment is we should be calling for red tape to be stripped from troubled sector.
“Now we support that but given where the tech stack has been and where the lack of innovation that has been occurred over the last decade, we think that that sort of call, while correct, is not the most pragmatic or practical in the short term to provide advisers with an escape from this problem.
“And we think software and platforms need to take a leadership role in trying to take this down because this is ultimately a technology problem.”
Source: DASH.
Whelan said Statement of Advice creation had seen little evolution over the last two decades, despite the potential for it to be created much more efficiently.
“Iress… did a white paper recently and there’s a couple of really important stats. Even among some of their stronger users, it still takes their advisers an average of 14.6 hours to produce a complex statement of advice – that hasn’t changed in the last 10 years,” he said.
“The average practice has got six different technology solutions, providing different services in the generation of the end-to-end financial planning process. And so if you’re an alien coming to earth for the first time, you can say well, maybe this is a concern here.
“That’s a really interesting but potentially alarming statistic that we should be aware of, particularly when you overlay it with the $13,000 average technology spend per FTE (full time equivalent employment).”
He said the right investment was required in the right places.
“Good software will manage integration partners for you. That right investment can really pay dividends from a cost of service.
“You can now actually provide that comprehensive new client advice with margin which provides incentive to grow again, which means more Australians can get advice.”
