Expect FOFA 'tweaks' for 18 months
Financial planning software provider COIN expects to be conducting Future of Financial Advice (FOFA) adjustments for the next 18 months.
Rubik (the company behind COIN) managing director, wealth, Wayne Wilson said some of his clients are "quite well advanced" and have settled on a process that they will have in place by the 1 July FOFA implementation date.
But other COIN clients plan to take an "interim approach" from 1 July, said Wilson.
They have opted to trial a particular system for a few months from 1 July to see what the issues are "in the field", he said.
"They're going to see what the pros and cons of various approaches are, and then settle on a more permanent approach in the third or fourth quarter of this year," said Wilson.
Institutions typically take a 'holistic' approach to compliance and then allow the various arms of their business to fine-tune the details, he said.
There are also some COIN clients who "probably aren't as organised as they should be", said Wilson - and they will be relying on the Australian Securities and Investments Commission's promise of a "facilitated approach" to FOFA compliance for the first 12 months.
One big challenge for everyone in the industry is that there is typically "no one source of data from which to derive commission and fee information", Wilson said.
"Every licensee has usually got multiple sources of data that they have to try and extract the information from to get it into the actual [fee disclosure statement]," he said.
"For some of our clients the legacy systems are so old and antiquated that [they are] having to look at more manual ways of extracting data than what you would hope would be a long-term integrated approach," Wilson said.
One client of COIN is using an offshore processing capability in the Philippines to manually extract data out of old systems, said Wilson.
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