“Older technology platforms will find that increasingly difficult to cope [with].”
ARE WE ACTUALLY INNOVATIVE? Kelly Power, national product manager of Asgard, says that the platform industry hasn’t really been innovative and instead has been very reactive to investor demands and compliance requirements.
“We’re now starting to see new players starting to innovate and start to build a more seamless, intuitive customer experience that’s focused on the end customer more,” she says.
“You’ll see a lot of that in the Next Generation platform work that John Shuttleworth and his team are doing at BTFG. That project is [designed] around what will be the next new innovation five years away.”
Power says the focus this year has been on developments in equities, SMAs [separately managed accounts], templating and online enhancements.
“But where the main innovation is happening, particularly within our business, is around improving the customer experience,” she says.
“It’s about how you interact with the system and making it the most intuitive and seamless customer service experience possible – [features like] STP [straight- through processing] and integrating insurance into your platform.”
Asgard’s latest offering, Infinity eWrap, is set to change the mould, says Power.
Their “customer-centric design process”, which involved observing planner behaviour and collaborating with them to build prototypes over two years, has resulted in the “Foxtel-like” design of Infinity.
“[It’s] really a product where you pay for your core package and then you can [include] add-ons as you need,” she says.
“Instead of paying for every single channel, you can just pick the ones that you need or [that] suit your circumstances.”
Generally, the trend in the market has been to offer full-service platforms and wraps, although there are limited-menu, mass-market offerings available.
“The [way] Infinity differs from that is that you can scale up or down depend- ing on your needs and you can do that in a client’s portfolio over the life of their portfolio,” Power says.
“So they can start off with a small account balance, say $50,000, with just a very simple investment need, and they might just want the core offer which is 11 managed funds plus insurance.”
The investor can decide to add equities onto the account at a later stage and pay for that feature at that point in time.
“You can really evolve with the product as the client’s needs evolve,” Power says.
AMP-AXA’s Burgess says adding capital and income guarantees onto North demonstrated innovative development.
“It was a brand new invention that we were first to the market with,” he says. “We didn’t write loads of business
early on…and [it] really wasn’t about following adviser demands.”
Burgess identifies SMAs and ETFs [exchange-traded funds], which are already featured on platforms, as future areas of further innovation.
“You wouldn’t say right now that that’s huge in terms of adviser demand,” he says.“The kind of FUM that flows into those products isn’t massive yet but that’s a feature you can point to and say that’s innovation, that’s being there before the demand.”
Model portfolio capabilities are also starting to feature more prominently on platform offerings, allowing planners to service more clients much more efficient- ly, Burgess says.
“From a client’s perspective, it looks very bespoke, like very tailored advice,” he says.
“That is really where platforms need to be – helping advisers demonstrate the value of their advice to clients but in a very efficient way when it comes to the actual transaction.”
Similar to Asgard’s Infinity Wrap, variable, or asset-based pricing, was introduced to North in April this year, allowing customers to pay a lower-cost administration fee for basic investment options.
Burgess says:“There are many providers, including AXA, [that] have got two types of platform. They have a cheaper, cut-down baby wrap, if you like, and then they have a fully-fledged, big-menu, full- price platform as well. “What we discovered [was] that having two very distinct products was really not what advisers wanted as a product going forward because that presented them with an issue of transitioning the clients.”
MLC’s Hawkins says clients’ demands resulted in adding an SMSF administration service to MLC Wrap.
“So effectively offering a full end- to-end self-managed service from trust declaration to fund administration, investment administration, reporting… all in the one service,” he says.
Paper-based forms and illiquidity issues have been resolved in MLC Wrap, Hawkins says.
He says the Custom and Navigator offerings caused frustrations around poor online transaction capability.
“Advisers can now do every core transaction on a platform online from the desktop,” he says.
“There were a lot of transactions that still required hard copy paper, et cetera, but what we’ve tried to focus on is getting 100 per cent of all of our core transactions online and [deliver] true straight- through processing – so the ability to go straight to market from the adviser desktop.”
The global financial crisis (GFC) caused problems with illiquid funds, causing client accounts to be either “transitioned out” or closed. Hawkins says new tools and techniques have now been created to handle those difficulties.
Financial planners have also been seeking transparency, portability and di- rect equities, combined with professional funds management, at a lower cost than managed funds, Hawkins says.
“SMAs fill that void nicely,” he says.
“MLC Wrap and Navigator are the only platforms with SMAs fully integrated into all of our tax structures, so IDPS [investor-directed portfolio service] super and pension as well.
“Others have got SMAs that sit on the side – ours is fully integrated.”
