DLT and CDR shifting investment data ownership
Distributed ledger technology (DLT) and the consumer data right (CDR) legislation will transition the source of consumer investment data from product providers to consumers themselves, according to a digital wealth management platform founder.
Speaking at the IMAP InvestTech Virtual Conference, Stuart Holdsworth, Financial Simplicity chief executive, said the combination of the CDR and blockchain technology would afford consumers with the ability to extract their wealth management data and move it to where they want it to go.
“We think that combining that with personal portfolio management technologies, like Financial Simplicity, creates all sorts of wonderful opportunities, and all sorts of different types of advice models,” Holdsworth said.
“It might not be a case of ‘I’m an adviser, I use a platform’, [it might be] ‘I use something that reads what my customers tell me’.”
He said the introduction of exchange traded funds (ETFs), separately managed accounts (SMAs) and fundamental indexing had propelled increased customer involvement in the investment process, a factor he said was driving the trend for customer data ownership.
“At the moment, a lot of the categorization of investments is done either by platforms, product providers or research houses, but what we're starting to find is that the consumers are getting involved in this,” he said.
But blockchain wealth management would not be one size fits all, Holdsworth said.
“We think there’ll be various different specialists doing various different components of investment management and they will have access to that type of information in a broadly available way,” Holdsworth said.
AUTHOR
Liam Cormican
Recommended for you
Sequoia Financial Group has declined by five financial advisers in the past week, four of whom have opened up a new AFSL, according to Wealth Data.
Insignia Financial chief executive Scott Hartley has detailed whether the firm will be selecting an exclusive bidder for the second phase of due diligence as it awaits revised bids from three private equity players.
Insignia Financial has reported a statutory net loss after tax of $17 million in its first half results, although the firm has noted cost optimisation means this is an improvement from a $50 million loss last year.
With alternative funds being described as “impossible” for fund managers to target towards advisers without the support of BDMs for education, Money Management explores the evolving nature of the distribution role.
