Provided by Flextrade
In Australia’s evolving wealth management market, interoperability is emerging as the solution to the challenges faced by the numerous brokers serving the active trader and financial adviser segments, who struggle with disparate systems, separate logins, and desktop clutter.
A financial adviser may need to open 10 different applications, including CRM, market and client data, as well as separate systems for international holdings, managed funds, client onboarding, AML (anti-money laundering), KYC (know-your-customer), and compliance monitoring, explains James Hammond, Vice President of APAC FlexTrade in Sydney.
For instance, if a client wants to know about their holistic wealth plan, the adviser needs to generate ideas across multi-asset investment vehicles, which involves extracting and calculating data from various applications. For brokers to undertake client onboarding, it often requires logging into separate portals, all of which is challenging.
As brokers think about the wealth market, the needs of a wealth adviser and an active trader are similar. “They both want access to a diverse set of products and instruments. For international equities, they want to look at company financials; For FX trading, macroeconomic data,” explained Hammond.
Customizing content for active traders
FP Markets, a multi-asset forex and CFD broker regulated in Australia, is an early mover in addressing these challenges. In January 2024, it rolled out FlexTrade’s Mottai Trader platform to 200 of its active traders for routing listed-equity trades to the Australian Stock Exchange (ASX), while expanding coverage to multiple products and asset classes.
“A key piece of client feedback is that they wanted to build out that platform with more fundamental data and more access to news,” said Joe Kelly, Head of Equity CFDs at FP Markets in Sydney. Kelly designed the platform for intraday traders, who conduct research several hours a day and base their decisions on short- and medium-term events.
Recently, FP Markets began providing access to data and analytics from the London Stock Exchange Group (LSEG) through Mottai Infini, a new interoperability framework integrated with Mottai Trader and Adviser, for publishing value-added services including news, research, analytics, and charting through a single-browser interface.
FP Markets subscribes to nine widgets, representing different levels of data, said Kelly. “With Mottai Infini and third-party data integration, it allows us a low-friction way to display those widgets within the Mottai Trader platform,” said Kelly.
“If there is any piece of technology not related to the fundamental trading that is useful, like research, data, and other content, we can go to a specialist and integrate those components,” he added.
An innovative approach
“The traditional method of interconnecting systems using an API, involves writing code so the two systems can communicate. Instead of the systems exchanging data through an API, they’re exchanging widgets, components, or modules that are already designed to make sure the two blocks can interact together,” said Jean-Michel Blanco, General Manager of Mottai.
Blanco explained that Mottai provides the partner with a bridge on the user’s desktop screen that knows where the user is clicking on the screen.
“Whether the user is an asset manager, dealer or high-net worth investor, the bridge keeps track of it,” explains Blanco. “There’s no need to update the market data via API since the bridge is redirecting the widget to the partner’s server, which updates content in real time.”
In the case of financial advisers, firms can add their onboarding and CRM tools into Mottai, so these components talk to each other, said Hammond.
Regulatory changes
In the 2000s, the wealth industry was dominated by vertically integrated institutional groups with 100 to 200 advisers, but the 2017-2019 Hayne Royal Commission shifted the market away from this model.
“Now there is a trend toward self-licensed AFSLs with 10 or fewer advisers which comes with the benefit of greater flexibility in product selection, technology, branding and compliance, which can provide a unique point of difference to clients,” said Craig Semmens, CEO of PhillipCapital in Australia, a provider of market access, data, execution services, clearing and custody services to wealth managers.
On the other hand, “advisers have lost a lot of flexibility in the types of services they could provide clients and in the choice of platforms they’d like to use,” said Semmens.
Many financial advisers have transitioned from using one platform to five trading platforms, client reporting, managed funds, banking, and cash management, and they may have another for bonds, he continued.
“What’s missing is an aggregator,” said Semmens, who sees an opportunity for a technology provider to assemble their own core platform with execution and clearing services integrated with the other adviser functionality.
For example, Semmens is focused on building an adviser platform around Mottai Trader integrated with PhillipCapital’s adviser portal, an external client portfolio management platform, tax engines and the latest technology for onboarding clients. As Mottai is web-based, the firm doesn’t need to worry about managing IT infrastructure, and it provides PhillipCapital with the ability to connect bespoke applications that advisers want into its framework and have single-sign on capability.
Planning for the future
As brokers seek business growth and serve clients holistically, they’re exploring interoperable solutions with single sign-on to provide access to multiple disparate applications.
“Single sign-on is an exciting feature for advisers who must log into seven applications every morning. This becomes more appealing as Mottai starts to wrap up more third-party products in the same solution and those products work with each other,” said Scott Anderson, chief relationship officer at Openmarkets, a trading and wealth fintech business that provides wealth managers and active traders with execution, clearing, and settlement services. For example, Openmarkets offers SwiftID, a digital onboarding tool, where advisers enter and verify their details, which could be accessed via Mottai.
Firms such as FPMarkets, Phillipcapital, and Openmarkets are at the forefront of innovative change within the Australian wealth market. As new technology entrants continue to emerge, the developing open ecosystem between brokers and vendors will continue to expand. Ultimately, the true beneficiaries will be the end investor.
