The ‘ideal’ financial planning platform has more than 20 key features that underpin the unique contributions which planners make to their clients’ lives.
In the early 1990s, master trusts emerged to compete with retail investment trusts. Master trusts’ ‘killer’ features included various investment options at wholesale fees, one application form to complete, one comprehensive tax statement and a consolidated report that enabled the planner and client to review the entire portfolio of investments and make modifications as desired.
At that time, planners thought that platforms gave them an edge when dealing with their clients and their clients felt that they had control and the perception that their financial planner was adding value. Indeed, first-hand discussions on master trusts in the late 1990s were considered by some UK financial planners to be the modern way of financial planning advice.
Master funds gradually morphed over the years into superannuation wrap platforms and investment wraps, or Investor Directed Portfolio Services (IDPS), as we know them.
Same same but different?
Is this year’s car with automatic gears, air-conditioning and cruise control different to a car with similar features manufactured in the 1990s?
They are both cars with similar features and they both perform the same basic function, but the 2015 model might have a GPS and park-assist to make life a bit easier.
The reality now is that platforms offer the same key features as before, but with more-publicised and newer frills-and-features enabled by new technology and advancements in online services.
Back office and core administration have improved, but their essential and most important role remains the same – to make life easier for the planner, provide transparency to investors and show that a planner can add value.
In our experience, there are more than 20 key features that make administration easier for planners and client reporting more effective. This is our take on what planners want to see in a platform – in no particular order.
- The financial planning software and the platform administration system are linked through online services and direct data feeds.
- Clients’ personal data collected by the financial planner on financial planning software is readily transferred to the administration system.
- Managed funds, direct share investments, bank deposits, a cash management service and top-performing multi-manager funds are all offered for choice.
- Managed accounts, available since 1997 through superannuation and IDPS platforms, are offered.
- Products offered are reviewed before being made available and they then become the Approved Product List for a dealer group.
- A dealer group can have a tailored investment menu and set standard advice or licensee fees.
- Investments can be dollar-cost averaged.
- Retail insurance, as well as group, is provided.
- Gearing and direct deductions from bank accounts can be automated.
- Tax parcels can be viewed and transacted upon for clients’ favourable tax outcomes.
- Fees paid by clients or receivable by planners can be readily available to view in real-time.
- A planner can have a complete dashboard overview of their client base with key statistics, alerts and fast access to detail information and reporting.
- Planners can view accounts online from a client’s perspective.
- The online access of assistants is transparent to, and controlled by, a planner.
- A planner can be alerted about accounts needing their attention, for example, expiring death-binding nominations.
- Online reporting is provided to client account level and across a client base so that the planner has complete transparency.
- Online reporting is flexible enough to provide comprehensive reports to suit a planner’s regular reviews and enable the planner to instruct modifications quickly.
- Switch and other instructions can be processed straight through from online to save costs and time, and ensure instructions are accurately captured.
- Planners can actively view the progress of instructions, such as the sells and buys of a switch.
- A client or planner can instantly update contact, address and other account details online.
- Product research can be viewed online instantly for assets in a client’s portfolio or any products on the Approved Product List.
- A planner can ask a knowledgeable administrator for platform information rather than having to go through a call centre.
- Fees are competitive – but note that cheapest is not necessarily the best.
This must-have list is the result of more than 15 years’ work on Fiducian’s front-end solutions, online reporting, and planning software. Two years ago, we launched our own highly configurable platform-admin software designed with administrators and planners in mind, and last year we launched new online services that we continually enhance to deliver the must-haves.
The focus for platform development remains unchanged. It needs to take advantage of the latest technologies and, in close collaboration with administrators and financial planners, strive to automate the administrative burden for both parties.
Through enhancements at the front end online reporting and services, integrated with or linked to planning software, platforms continue to be solution providers for financial planners and support the real value that full financial planning delivers for clients.
If a financial planner cannot see these features in their recommended platform, then they need to ask why not, because the technology is already here.
Alan Dunne is the chief information officer at Fiducian Group.
