Regulation still crippling platform budgets
Platform providers are still bleeding hundreds of millions a year on regulatory compliance, at the cost of improved functionality, an Investment Trends report shows.
Compliance last year absorbed around 55 per cent of providers' budgets, up from 51 per cent the previous year, according to the December 2014 Platform Report.
At the same time, spend on new functionality fell 22 per cent, to five million for the average Wrap or Master Trust, down from $6.4 million in 2013.
The quandary could put platform/planner relationships in jeopardy, with planners signalling a willingness to uproot if the provider cannot meet their functionality.
"Planners are expressing greater freedom of platform choice in 2014 and switching away from those who don't meet their needs," Investment Trends senior analyst Recep Peker said.
However, platform providers have responded quickly, according to the survey, which recorded the highest planner satisfaction score in 11 years.
"So, despite constrained budgets, platforms are fighting to efficiently provide the best functionality that meets the needs of their users," Peker said.
When it came to favoured platforms for overall functionality, Colonial First State FirstWrap held the first spot, followed by netwealth and HUB24.
"Competition has become very intense at the top end, but Colonial First State FirstWrap managed to retain its position as number one in the industry following another year of significant functionality enhancements," Peker said.
Recommended for you
The FSCP has announced its latest verdict, suspending an adviser’s registration for failing to comply with his obligations when providing advice to three clients.
Having sold Madison to Infocus earlier this year, Clime has now set up a new financial advice licensee with eight advisers.
With licensees such as Insignia looking to AI for advice efficiencies, they are being urged to write clear AI policies as soon as possible to prevent a “Wild West” of providers being used by their practices.
Iress has revealed the number of clients per adviser that top advice firms serve, as well as how many client meetings they conduct each week.
