A new online tool is set to revolutionise the tedious, confusing and time consuming process when self-directed investors apply for a managed fund.
The tool will also be useful for fund managers and fund administrators – reducing the costs of processing applications, including compliance with new anti-money laundering legislation and FOFA changes.
Developed by Australian Fund Monitors (AFM), the OLIVIA application system makes the process of completing a managed fund application both simpler for the investor or their financial advisor, and more efficient for the Fund Manager or their Administer to process – solving a problem which is a significant expense for the funds management industry.
A recent report by The Australian Bureau of Statistics shows that only 19 per cent of the businesses in the finance and insurance industry receive orders online, compared with 48 per cent in the manufacturing sector. Given that insurance and banking is moving significantly online, it would seem that the funds management industry is lagging the other sectors.
Called Olivia 123 (Online Investor Verification & Interactive Applications), the online, interactive system cuts the time taken to complete a paper based application by up to 70 per cent, and at the same time reduces the errors and omissions which cause delays and add to the expense of processing paper based applications.
OLIVIA divides the process into three modules – Data Collection, ID Verification, and Execution as it guides the user though the application process, which in many paper based forms consists of up to 30 pages or more.
Chief Executive Officer of AFM, Mr Chris Gosselin, said “Not only will Olivia 123 cut down the time taken to apply for a managed fund, OLIVIA can save investors’ details to make subsequent applications even faster”.
Mr Gosselin said fund managers and fund administrators will also welcome the new application tool as an average 50 per cent of written applications contain errors or omissions, causing delays, requiring phone calls and more administrative time to complete them correctly.
“Many paper based application forms are over 25 pages long, although I have seen some that are up to 90 pages. Ironically only a minority of these pages are applicable to each investor, but an inflexible, ‘one size fits all’ approach leaves them daunted and intimidated by the extensive information required. Frequently, some investors simply put the application in the too hard basket”, he added.
The OLIVIA process means investors only see and complete relevant sections related to their investment entity – whether individual, partnership, company or trust – without jumping around and potentially missing entire sections of a form.
When filling out the traditional forms, there is no one on the spot to inform the applicant that they have made a mistake or are missing vital information – with the result that the form is frequently not processed or approved in time for the fund’s cut off dates. The investor’s funds can often sit idly in the custodian’s bank account, not earning interest, and not being put to work in the market.
Mr Gosselin said “Anti-money laundering (AML) and Know Your Client (KYC) requirements adds further pressure, creating even more hurdles for investors completing forms, as well as time and expense for fund managers and the fund’s administrator when processing them.
“Olivia has partnered with Edentiti, a leading provider of online ID systems to enable investors to complete AML and KYC verification in real time, reducing frustration, and dramatically improving the accuracy and speed of processing applications”, he added.
Olivia 123 uses a secure server using the latest in two-step authentication technology, and guides investors through the application, preventing omissions and errors. Once completed, with the investor’s ID verified online, the application can be executed electronically. Scanned copies of additional documentation can be uploaded with the application, or if required printed, verified and posted in the usual way.
Technically OLIVIA can be used with any type of managed fund, including property funds, while its processes are flexible and customisable to adjust and adapt to each fund’s specific requirements including branding, terms & conditions or specifics such as minimum investment amount or investor type. OLIVIA will be available for individual licensing by fund managers, or master licenses for advisor groups or fund administrators.
