The high cost of change?
How much will it cost planners to changeover their back office in order to offer wrap services?
This was one of the questions posed at a recent Sydney conference, with many planners wary over the cost of moving clients into a wrap service.
Investor Security Group chief Robert Keavney, who is in the process of making such a switch, says the move to wraps has involved a "big up-front cost".
"I'd love to tell you that you throw a switch and it's over, but it isn't," he said.
BT Portfolio Services' Dan Powell agreed that there were teething problems with some financial planning firms when making the transition.
"We've dealt with firms who have switched from a master fund to offering a wrap service with the changeover period taking only three days," he said. "But we've also dealt with firms switching to a wrap service from a custodial service where the transition took four months."
Harold Bodinnar & Associates director Don Paviour-Smith said adopting the new technology to offer a wrap service was not only costly in dollar terms but would also involve a "cultural shift" that would provide a "hurdle" for many advisers.
"I would say that the technical skills of many advisers in our firm is not great," he said, "and this is a barrier we will have to overcome as we introduce new services".
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