Future of fee disclosure
A new breed of automated technology has the potential to dramatically reduce the time needed to produce Statements of Advice (SOAs) while improving fee transparency.
By eliminating the need for complex spreadsheets to meet platform fee disclosure requirements, financial services software provider Iress Market Technology estimates the time needed to produce this part of an SOA could be reduced by up to 80 per cent.
Iress has upgraded its desktop service Xplan to achieve this, introducing an automated platform fee disclosure process that also reduces the chance for human error.
The new tool was developed over a nine-month period in consultation with dealer group Genesys WealthAdvisers.
Genesys director Andrew Creaser said automated technology has important benefits for dealer groups, advisers and clients, improving fee transparency and giving them detailed information on where exactly their money is going and why.
Iress wealth management solutions general manager Andrew Walsh said the tool, one of several new features for Xplan, is designed to improve business efficiency by streamlining the SOA production process.
“Dealer groups and advisers today aren’t just looking for technological solutions to common problems, they’re looking for integrated systems that will enable them to run their businesses more efficiently. [The new technology] is about leveraging information that’s already available.
“Most dealer groups use quite complex spreadsheets to systemise the disclosure of platform fees, some of which needs to illustrate to clients why one platform has been chosen over another, for example. So they become quite burdensome. Also, because these spreadsheets are usually maintained by a key person, they’re subject to key person error.”
The technology caters for advice fees, platform provider fees (including tiered scales), investment management fees, platform provider and investment manager commissions and stock broking charges.
As Xplan is web-based, alterations to fee schedules can be deployed to all users immediately.
“Dealer groups can be confident that the advisers producing the SOAs are using up-to-date information,” Walsh said.
The tool can also be tailored to suit individual dealer group and adviser disclosure requirements.
“It doesn’t dictate a reporting format, but rather provides the structure for [dealer groups and advisers] to do their reporting,” Walsh said.
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