CoreData founder Andrew Inwood

Australia has an opportunity to learn from the UK advice industry’s developments in wake of its 2012 Retail Redistribution Review, with better licensing relationships, more control of technology platforms and the adoption of regulator-approved internal processes earmarked as key developments worth adopting according to CoreData founder Andrew Inwood.

Speaking at the Association of Financial Advisers’ national conference on Wednesday, Inwood went through some of the global trends in financial services that were both affecting the Australian market and pre-empting what will happen domestically.

Alongside broader macroeconomic trends such as the outsized effects of government and regulatory intervention on industry, which should continue “for some time” in Australia, Inwood identified the UK’s RDR reforms as highlighting the changes to be expected after the kind of reform Australia experienced at the Hayne royal commission.

The first of these observations, he said, is that UK advisers are forming “really interesting and intense” relationship with investment platforms and making them do more of the work.

“Their platforms often aren’t owned by the tech providers,” he said, referring to the trend – already developing in Australia – for larger licensees and advice groups to either develop proprietary systems of white label existing ones.

“Making sure that those things are really powerful, and drive the systems inside the business are really important,” he said. “I’ve sat with them and I’ve watched them use their technology. For very many of the businesses, even the average ones in the UK, what’s being used is streets ahead of what we’ve got in Australia.”

Inwood says the relationships between UK advisers and their licensee equivalents – known as networks – are also healthier.

“They found a way to make the network and the adviser be much more aligned in outcomes,” he explained, adding that the relationship is more like a “little brother, big brother” one. “Getting a joint view of the world is going to be a really important part of mutually assured success,” he said.

The UK industry has also de-risked advice by setting up processes to do the work and getting regulatory approval for it.

“They’ve taken a lot of risk off the table through process, they’re letting the process do the work and de risk it,” he explained. “By setting up the process to do the heavy lifting [and] by signing off the process with the regulator, and making sure that is really transparent, that removes a lot of the risks that actually exist inside the business.”

The fourth thing UK advisers do better since the RDR is something ASIC chair Joe Longo implored advisers to do on Tuesday – become more proficient at articulating the value of the service they provide.

“They’re doing a very powerful job of anchoring the value which they create,” Inwood said. “We fumble this away routinely as an industry.”

 

 

One comment on “What UK advice is getting right: CoreData”
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    Certainly much to be learned in terms of better relationships between networks/licensees and advisers – especially on the alignment of outcomes.

    The tech ecosystem is more diverse but the tools in the UK are quite immature relative to what is required in Australia to produce a compliant SOA efficiently.

    There is also major differences in how data is handled and exchanged between platform providers and advice CRMs.

    Our experience of the UK Advice Tech market tells us that this ‘intense relationship’ between adviser and platform does not currently resonate with Australia under BID, particularly where you talk about fully integrated offers. Our licensees (with two exceptions) will never have the scale to develop or capability to build in-house solutions that compete with the major tech providers, let alone Salesforce or Microsoft.

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