Regulations pause platform enhancements
The spate of regulatory changes in the financial services sector has halted product enhancements of platforms and stagnated projects, according to Eureka Whittaker Macnaught.
The financial planning firm's chief financial officer, Andrew Jones, said many projects that were in the pipeline got delayed due to the legislative changes.
The Future of Financial Advice reforms, opt-in, changes to conflicted remuneration, grandfathering principles, and other reporting requirements had drained capital budgets away from product enhancements from a client perspective.
"When you're flicking accounts from one grandfathered account to a non-grandfathered account, what should platforms be passing on?" he said.
"Every time there is what appears to be a modest legislative change that's agreed upon, it has a multiplier effect in terms of systems and changes. What sounds logical in theory has massive real life practice and systems implications."
Jones, who sits on the Colonial First State FirstWrap adviser council, said he had seen first-hand the delays that had occurred in platform projects due to regulatory changes.
This includes enhancements like platforms expanding their model portfolio or managed account functionalities, offering annuities, introducing more dynamic reporting systems, providing clients and the end-user similar functionality offered to planners, or subtle changes like inserting subtitles in reports.
"It's just all sorts of permutations. You've got to go through and do your prioritisation: what have you got to do, and when? And what's the next roll of projects?" Jones said.
AUTHOR
Malavika Santhebennur
Recommended for you
As the industry navigates the fallout from recent product failures, two major AFSLs have detailed their APL selection process and relationship with research houses, warning a selection error could “destroy” a licensee.
The impending retirement of financial advisers in their 50s could see the profession face significant succession challenges over the coming decade and younger advisers may not be the answer.
With a third of AFSLs being solo advisers, how can they navigate key person risk and ensure they are still attractive propositions for buyers when it comes to their succession planning?
A quarter of advisers who commenced on the FAR within the last two years have already switched licensees or practices, adding validity to practice owners’ professional year (PY) concerns.
