Complacency holding us back
The biggestrisk facing most financial planners is complacency; the unjustified confidence that growth will continue unabated, that their business is virtually fireproof.
The battle for market share between stockbrokers and financial planners is heating up, with new technology stoking the fire. This battle will burn off all illusions that growth is going to walk in the door.
On the edge of the battle are the major banks, which face significant product risks as technology allows firms closer to the client to cherry pick products and services.
Banks may be left out of the equation, as down the track brokers and planners use technology to go straight to fund managers for margin loans, cash management trusts and more. In fact, this could happen with today’s technology.
Each day we process half of the trading of the Australian and New Zealand stock exchanges, as well as processing margin loans and other financial products, and we have evidence that the competition is heating up.
Ord Minnett advisers, for example, will soon have real time access via their desktop to buying and selling shares, client trading history, portfolio management, margin lending, cash management trust balances and global transactions. From enquiry to settlement, client activity is handled as a click-through process.
The idea is that the less time advisers spend on finding and filing information, the more they are able to meet the immediate needs of clients. If they can do the whole job during one phone call, so much the better.
Giving advisers direct access to more real time client and product information than in the past, through commissioning a complete suite of technology services, is the way of the future in this industry. These services should include live access to wrap accounts, margin loans and cash management trusts.
We see the transaction as the future hub of finance, adding a broad range of financial products around that hub, helping partners deliver better service to their clients. But the industry needs more research and development spending to make share and financial transaction markets fairer, cheaper, more efficient and reliable.
In that way, the competition for market share is fairer, and the outcomes for the investor are better — something the banking, broking and planning communities would applaud.
Stephen Lake is chief executive officer, Global Banking and Securities Transactions (GBST).
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