Opportunities and threats face planning tech space
Software providers that hang on to old technology too long risk losing their market share to innovators, but being first to market is also a risky proposition, according to head of COIN Wayne Wilson.
Wilson, who was appointed by software provider Rubik to head up COIN when the group acquired COIN from Macquarie, also said there would be huge changes in the way client data is used which will have ramifications for institutions, licensees and advisers.
Legacy systems will continue to be a big issue in the technology space, partly because institutions have put so much money into them and have planned on monetising that spend over a long period of time, Wilson said.
He said the instos wanted to maximise profit from existing systems, but it was also important not to get left behind because they would start to lose market share to newer products.
The instos would also be reluctant to compromise the good will that had been built up in certain systems or brands over time, Wilson said.
"You don't want to have to close systems and start again, you want to be able to clone systems and iterate them, because that's a fast way to market. If you have to start over, the level of complexity is magnified and [so is] the prospect of failure, missing scope, [and] budgetary overruns," he said.
Plenty of institutions have walked away from upgrades or other projects in the last five years in situations where they have known what they wanted to do, but the spend has been too big, Wilson added.
Issues facing financial planners and licensees include a steady drop in margins and greater accessibility of data.
Wilson said licensees would look to technology to help make up ground in terms of profitability, and there could be a shift back to the home office based on the use of tablets because of the instant data accessibility they provide.
Tablets "will define financial planning for the next decade" and allow an adviser to travel to clients and save on office administration.
Tablets could also help advisers manage social media interactions and perform distance consultations and conference calls via Skype, Wilson said.
He said there was an opportunity for a technology provider who could begin to integrate social media channels used by advisers and clients - such as LinkedIn and Facebook - with their planning data to help save on double keying and data migration.
Because data is generally becoming less constrained and younger generations of clients are expecting greater access to their information, this would put greater emphasis on security, he said.
Effective use of cloud computing could help save costs for an adviser, who could allow clients to keep their own contact and address details updated or even fill out their own fact find, saving advisers time and money, Wilson said.
He said advisers could give clients read-only access to deeper data, but allowing clients to make further changes at that level could also compromise the reliability of that data.
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