The rapid growth of technology has seen falls in the cost of services and a growth in information, which in the financial services industry is well evidenced by the explosion of online trading.
The rapid growth of technology has seen falls in the cost of services and a growth in information, which in the financial services industry is well evidenced by the explosion of online trading.
As a result of these changes pressure is being placed on financial planners to find new ways to deliver cost effective ways of dealing with clients, according to AUSMAQ senior relationship manager Michael O’Farrell.
And this pressure will continue as transaction prices drop to record lows says O’Farrell and may prompt some clients to ask what they can expect from their planner?
“In this environment, clients are looking for value-added service in respect of both the initial and regular ongoing advice, access to information and databases and administration systems that minimise their personal administration, that is the need for extensive paperwork to follow their investments,” O’Farrell says.
“In essence clients are prepared to pay a fee for service if the service is tailored, has a good chance of getting an enhanced yield and leads to less hassle, particularly around tax return time.”
“Technology will enable unique product offerings to be developed and centred around electronic portfolio administration systems. This will be linked to online access to re-search and databases, asset allocation models and customised consolidated investment reports all available at the touch of a button.”
“It offers a number of advantages to financial planners by allowing them to implement an investor’s financial plan at the touch of button and to regularly rebalance client portfolios and create consolidated investment reports for the investor,” O’Farrell says.
However O’Farrell concedes not all planners can readily gain access to such sys-tems, as the supply of technology and the processes to exploit it are expensive and sit outside the budget of most planners.
O’Farrell says this will lead to a growth in outsourcing of technology and back of-fice administration.
“This is a big game requiring substantial investments for groups that are serious about offering support on a commercial scale. Whatever the size of the organisation, the trend is likely to be towards outsourcing,” he says.
