New advice software reflects regulatory pressure

A financial advice software provider has launched a new service it hopes will help advisers meet potential new regulatory requirements.

Midwinter Financial Services has introduced a new advice tool, Total Product Replacement (TPR), to its Reasonable Basis software. The new functionality allows advisers to test a number of different potential product results across investments, super and pensions, allowing them to determine the best outcome and demonstrate that to the client.

Midwinter managing director Julian Plummer described the release as “a major development in the provision of financial advice in Australia”.

Plummer said his group was pre-empting the changes anticipated from the Ripoll Report and the Cooper Review, which could see a fiduciary duty requirement for financial advisers introduced that might see the bar raised on the current ‘reasonable basis’ test for advice.

At the moment, advisers only have to provide one recommendation, which doesn’t have to be the best option, Midwinter director Matt Esler said.

“Under the anticipated changes, advisers will need to provide multiple recommendations, and that hasn’t been previously possible for them.”

TPR allows for a complete portfolio view by enabling any combination of products to be analysed, Plummer said. The software gives access to thousands of super, pension and investment platform fees and features information, meaning advisers will no longer need to run separate product replacement advice analyses. As such, it provides advisers with the ability to make multiple advice recommendations as well as full product replacement and fee disclosure outcomes for all tax structures.

“The ability to provide product replacement advice on any combination of investments, super and pensions on any tax structure and using any remuneration structure means Midwinter’s financial advisers will be … ahead of expected reforms to the provision of product replacement advice and adviser fiduciary duties,” Plummer said.