The functionality of platforms used by Australian advisers has come a long way.
“In the past, platforms supported advice with administration, the custody of clients’ investments and reporting,” SuitabilityHub managing director Recep Peker tells Professional Planner.
“But now, virtually all platforms offer workflow tracking capabilities, model portfolio functionalities, client portals, integration with multiple systems and separately managed accounts.”
Finura Group joint managing director Peter Worn says platforms have evolved to make the adviser’s back office more efficient with functions such as account opening, straight-through processing, digital fee consent, reporting tools and client portal capability.
Avanzare Group managing director Jaime Johns believes platforms have also worked to improve client engagement.
“They have invested in either acquiring existing software or developing tools and features that enable advisers to communicate and interact with their clients more effectively,” Johns says.
“These include online portals, mobile apps, chatbots, digital signatures and personalised content.”
Peker says platforms have also been focused on alleviating advisers’ need to call their contact centre, usually a big drain on advisers’ time. Innovations include online workflow trackers, online chats that can serve multiple advisers simultaneously and straight through processing.
Behind the changes
Johns says several factors have driven the improvements in platform functionality, including heightened competition, technology developments in other sectors, regulation, consumer expectations, security concerns and M&A activity.
“These factors have created pressures and opportunities for platforms to innovate and differentiate themselves in the market,” Johns says.
Johns adds that the Covid-19 pandemic accelerated digital adoption, pushing platforms to enhance remote capabilities.
She says the platform market has become more consolidated and commoditised. There are fewer players in the market and the products and services platforms offer have become more standardised and interchangeable.
“This means that the platforms are competing more on price and less on unique features or value propositions,” Johns says.
Pecker believes that the trend toward self-licensing is driving some platforms to provide more support and education to advisers to fill the gap of what they received by being part of a big licensee.
Worn says a highly competitive market has meant the bang for buck for platform features has never been better with a steady decline in administration costs to the end investor.
“The real winners have been advisers who don’t actually pay for platforms but yield many of the practice efficiency benefits in terms of reduced cost to serve their clients,” Worn says.
“Practice profitability has never been higher and platforms have played an instrumental role in that.”
Where platforms are focused
Peker’s research reveals four areas that platforms are currently focusing on. The first area is platform digital transformation.
“Platforms are rapidly modernising their digital capabilities and becoming more like apps that consumers use, such as Uber or Amazon,” Peker says.
“There’s more real-time self-serving and tracking of instructions. This is built around giving advisers a scalable foundation for their businesses and helping them become more efficient.”
The second area is developing capabilities to help advisers demonstrate they are delivering better outcomes for their clients, as demanded by the Hayne royal commission.
Thirdly, platforms are looking to better support advisers with their annual or periodical client reviews by streamlining tasks like data collection and report generation.
Lastly, platforms are very focused on cyber security with more mandating multi-factor authentication, Peker says.
The future
Looking ahead, Worn expects the new battlefront to be in adjacent technologies that support advice businesses.
“We also hope to see innovation in how data is shared between platform providers and advice technology solutions,” he says.
“The industry still relies on quite old data standards which we have well truly outgrown. We hope to see the platform and technology providers agree on a new data-sharing standard to remove the problems associated with traditional data feeds.”
Johns says the future of platform functionality is likely to be shaped by digital transformation, AI, blockchain, open banking and personalisation to each client’s needs.
She also expects to see direct-to-consumer offerings that provide simple investment options while educating the consumer.
“These lower cost options will also be leveraged by advisers with clients who have simple needs around super and investing and later allowing them to transition onto to a full suite of investment options with platform features,” Johns says.
“Also, high-net-worth clients or family offices don’t always have one professional managing their money and being able to connect these professionals for better reporting and oversight will be of enormous value to these clients.”
