Advisers need blockchain-enabled annual consent
More platforms should enable blockchain for annual consent as it is becoming essential for the efficiency of advice practices, according to Centrepoint Alliance.
In October, Colonial First State (CFS) signed on to Iress’ blochain-based advice fee consent solution, which allowed practices to manage their obligations under the Financial Sector Reform (Hayne Royal Commission Response No.2) Act 2021.
The solution captured fee consent for ongoing service fee agreements through a new workflow within Xplan. The information was then validated and authenticated through blockchain and passed through to CFS.
Speaking to Money Management, Centrepoint Alliance, group executive advice, Paul Cullen, said the platforms seemed to work independently on a fee consent solution.
“Even though from an advice perspective, we were pleading, for them to agree to a common approach, it didn't really work,” Cullen said.
Centrepoint Alliance’s general manager licensees, Allison Dummett, said integration of blockchain into the annual consent process met new legal requirements and created efficiencies.
She said advisers that had not yet adopted blockchain-enabled annual consent were burdening their offices with multiple channels of communication and more workload, which was ultimately not adding value to the client.
“The client wants the time from the adviser and their staff, in their investments and insurance and their plan, instead of having their attention diverted to something menial,” Dummett said.
Without blockchain, advisers would have to manually issue fee disclosure statements, get the client’s consent to renew the arrangement and then send the consent to a product provider.
Patrick Jackson, Centrepoint Alliance, group executive investment solutions, said there was a real opportunity for the industry to work together because if these consents were not completed properly, advisers risked not being able to receive fees from the providers.
“So, it's a matter of the other providers either jumping onboard the Iress solution, which [certainly for us] is preferred as we use the Iress solution Xplan, or a version of it,” Jackson said.
“Getting them to all behave consistently on this is difficult and at some point, I think it'll be a unique proposition for the platform providers that do it best and most efficiently.”
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