Net brings change but not business
The Internet and technology represent the biggest change in the managed investments indus-try, yet there is still hardly any real business being transacted via the medium.
The Internet and technology represent the biggest change in the managed investments indus-try, yet there is still hardly any real business being transacted via the medium.
So says BT Financial Group executive vice president, Terry Power who will be speaking at the IFSA conference.
Power says that the impact of the Internet is most obvious in the way that people are supplying and gathering information, but they are not yet ready to take that next step and transact busi-ness on the net.
"People are now familiar with the changes the Internet has brought and is likely to bring in the future,” Power says. “The stage of acceptance is past and the days of denial are gone. The days of clients looking to use better services and products has arrived."
This acceptance of technology and the Web has pushed more people into seeking advice, ac-cording to Power who predicts that the next trend will see a shift in the balance of power from manufacturers to distributors.
“As distributors become more powerful and concentrated they are demanding more of the fees cake, which will result in lower fees. To date, fees have not been a big issue for investors since there have also been big returns,” Power says.
“After a few years of poor performance investors will start querying fees although that is still hard to see in the short term.”
This swing will also be driven by the greater technical capabilities of better informed planners who now have greater choice among fund managers.
Power says good competition in the industry drives services to planners and clients and creates respect.
“Good competition is essential between planners and between fund managers, with the former paying lower management expense ratios (MERs) but getting more via technology and being driven by change,” Power says.
“People demand more in service and organisations need to be flexible going forward. Any-thing that is cast in stone conflicts with changes which are coming through technology. And to take that approach will put anyone out of business quickly.”
AUTHOR
Jason Spits
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