Platforms face compliance issue over trades
Dealer groups could be faced with compliance issues over slow trades and transactions inside platforms, according toColonial First Stategeneral manager of product Brian Bissaker.
Bissaker claims that as platforms are administration services which are concerned with the execution and settlement of trades, they are beholden to the service standards of underlying managers on the platform.
“If a client then switches from one fund to another that transaction takes place at the end of the day, and is normally followed by a report a day later so the process takes two days at least before the funds are ready to enter the new fund,” Bissaker says.
“Some systems in the market take up to two weeks to do the same thing and any market moves in that time can potentially hurt the client. While markets can go up during that time clients don’t want to ask themselves if they feel lucky.”
According to Bissaker a simple delay can lead to losses which easily outweigh the fee differences between platforms and he says this is an issue which has been overlooked in the debate surrounding the pricing and services of master trusts and wrap accounts.
“There needs to be a raising of the consciousness of this issue as the standard of trades is not high and the compliance issue has not been a high priority either,” Bissaker says.
His comments follow on from recent news that Colonial’s own platform, FirstChoice, passed the $5 billion barrier in funds under management last week with the group set to roll out a number of enhancements in the areas of transactions and reporting later this year.
“We feel the low cost platform sector of the market has quite some distance to go and while it is early days we want to ensure we remain the leader in providing services in this market,” he says.
Recommended for you
With Fortnum Private Wealth and Professional Financial Services now unified under the Entireti umbrella company, CEO Neil Younger has detailed to Money Management the firm’s new direction and future expansion.
The FAAA has suggested looking offshore for overseas financial advisers to ease the adviser shortage, but are employers willing to take on the burden of workplace visas?
There may be a huge influx of alternatives coming to the market, but timing and access difficulties mean advisers can easily end up disappointed with their selection, according to Morningstar global CIO Dan Kemp.
An NSW individual has pleaded guilty to one criminal charge of providing unlicensed financial services after promoting crypto investments at national seminars.
