While most gatherings of financial planners and accountants feature a lot of grumbling about superannuation complexity and compliance, the business reality is that most need to react positively by improving efficiency.
Take, for example, the increasing volume and complexity of Statements of Advice (SOAs), particularly following the introduction of Super Choice. These can unnecessarily take up a lot of paper and many hours of adviser time.
You could complain mightily about this. But many planners are still living in the ‘paper era’ and have not latched onto the right technological solutions to these challenges.
It is time to apply technology in ways that not only meets the demands of compliance, but also makes the planner a better and a more trusted adviser.
Ongoing risk exposure and having to fill out time consuming SOAs and superannuation tender documents are among the most complained about issues at professional gatherings. And who could blame planners for feeling this way? The compliance stakes have always been high and seem to get higher with every passing month.
The net result is that too many financial planning professionals dedicate themselves to paperwork. In the long-term this is a risk in itself, for if the true value of the ‘trusted adviser’ is not there, client focus declines, and it becomes harder to get the team motivated into finding new business opportunities (it’ll just be more paperwork).
What is the solution? The real solution to the twin dilemmas of compliance and better focus for planners can be found in the Internet. Why the Internet? Because only through the Internet can you give planners a tool that is updated to the minute by the providers of superannuation products.
Internet solutions can provide analysis that gives advisers ‘from and to’ comparisons that solve some of the compliance issues surrounding choice of fund. This could either be used as an independent third party report or as their own documentation. In addition, planners could have their SOAs produced online, if required.
The beauty of the Internet is that it is a technology that even the smallest businesses could use, giving even the smallest financial planning business real analytical and research grunt.
This technology can have the potential to assist financial planners in retaining and gaining assets under advice, adopting a more professional approach, improving efficiency and, as a result, providing more time to see clients and prospective clients. But the first step is to see beyond the problems and to be prepared to apply some technologically based managerial change.
One of the keys to the success of this Internet approach would be that it continuously updates information to enable comparisons of the key features of leading superannuation funds, which would allow financial planners in particular to efficiently undertake ‘from and to’ comparisons.
The technology should also be there for fund members, enabling a corporate superannuation fund member to assess the value of that fund against other alternative funds. And the technology could allow a financial planner to manage, online, a competitive tender for corporate superannuation funds at minimal cost.
The Internet should therefore be seen by financial planners and employers as an effective tool to not only help protect corporate fund assets in a choice environment, but secure assets from new entrants who are considering joining their employer’s fund.
What would work best for planners is a qualitative and quantitative tool, with extensive analysis of the key differences between funds, plotting where the member is in their current fund, and where they would be in any new fund. We think a real comparison needs to have feature weightings, so the member can evaluate things in an individual way.
Feature weightings need to at least include fees, investment arrangements and performance, as well as additional benefits such as home loans, insurance and communications.
The net result of using the right technology is that planners would become free to develop client relationships, manage the corporate side of things, and be far more active when new business opportunities arise.
It is not just a matter of compliance or having the necessary analytical grunt to back up your advice, it is actually also a better way to manage your business. This makes Internet technology a win-win situation for planners and their clients.
We can easily sympathise with financial planners and others facing a growing mass of compliance requirements, especially in superannuation. But in the long-term, the best response is to find greater efficiency through technology — that way you’re ready for today’s demands and tomorrow’s opportunities.
Christopher Butler is managing director of the Heron Partnership.
