Regulations pause platform enhancements
The spate of regulatory changes in the financial services sector has halted product enhancements of platforms and stagnated projects, according to Eureka Whittaker Macnaught.
The financial planning firm's chief financial officer, Andrew Jones, said many projects that were in the pipeline got delayed due to the legislative changes.
The Future of Financial Advice reforms, opt-in, changes to conflicted remuneration, grandfathering principles, and other reporting requirements had drained capital budgets away from product enhancements from a client perspective.
"When you're flicking accounts from one grandfathered account to a non-grandfathered account, what should platforms be passing on?" he said.
"Every time there is what appears to be a modest legislative change that's agreed upon, it has a multiplier effect in terms of systems and changes. What sounds logical in theory has massive real life practice and systems implications."
Jones, who sits on the Colonial First State FirstWrap adviser council, said he had seen first-hand the delays that had occurred in platform projects due to regulatory changes.
This includes enhancements like platforms expanding their model portfolio or managed account functionalities, offering annuities, introducing more dynamic reporting systems, providing clients and the end-user similar functionality offered to planners, or subtle changes like inserting subtitles in reports.
"It's just all sorts of permutations. You've got to go through and do your prioritisation: what have you got to do, and when? And what's the next roll of projects?" Jones said.
AUTHOR
Malavika Santhebennur
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
