By Alex Burke, Iress
The Australian market demands a highly nimble approach to regulatory risk management. In this environment, choosing the right technology partner for your business can determine whether you end up ahead of the curve or buried in paperwork.
The post-Royal Commission reform pipeline of the past few years has led to a dramatic realignment of the stockbroking and investment advice community.
The most obvious and initial signs were the big four banks exiting the wealth space in quick succession. For those who remain in the industry, there’s the challenge of a regulatory agenda that treats all advice as comprehensive financial planning – even if the service being provided is scaled and specific.
While there may be positive developments on the horizon – depending on, for example, the outcome of the Quality Advice review – it’s clear that in the Australian market, change is the only constant. Which means that the approach you choose to manage these changes and stay on top of ever-shifting compliance requirements will be vital to the success of your business.
Fortunately, this isn’t something you have to do alone. With the right technology, it’s possible to streamline your process for managing ongoing compliance obligations, cut down on admin costs and maintain an up-to-date picture of the operational performance of your business and any sources of risk. By doing this, you’ll be able to free up more time for doing what you actually do best: providing clear and timely advice to clients about their investments as and when they need it.
But how do you choose the right solution – and the right partner? Given the volume and sensitivity of client and investment data your business likely handles on a daily basis, any changes to existing processes carry a number of risks: these range from increased costs to information slippage as a result of inadequate change management.
This is why it’s crucial to consider the fundamentals of any technology switch. The first factor is consolidation. As reflected in Iress and Business Health’s inaugural Advice Efficiency Survey report, “more technology” isn’t always better and too many cooks invariably spoil the broth.
According to the research, the top 10% of the most profitable advice firms were spending less time on administration and more time in front of clients – this may seem like a no-brainer at first glance, but the way the majority of firms surveyed achieved this balance was via cutting down on duplication across multiple different systems.
This is all the more reason to find a technology partner that can offer a full end-to-end solution for your business. And in circumstances where additional software is being used, you should prioritise a technology partner that offers integration with those services where possible.
Given the regulatory concerns mentioned above, it’s also essential to consider how an end-to-end solution can help you better manage your compliance activities. Does it offer automation of certain processes? Can it provide ongoing analysis of key sources of risk so you can identify and address issues before they arise?
Any solution that can assist in proactively managing compliance concerns will save your business time and money in the long run by reducing the need for internal resources dedicated to post-facto auditing – and, potentially, remediation.
Finally, ensure your technology partner can demonstrate a deep understanding of the complete value chain from stockbroking to scaled investment advice and has a proven track record among businesses like yours. Given the amount of recent regulatory changes that have effectively put all advisers in the same basket, the last thing you need is a partner that does the same.
Advice isn’t one-size-fits-all. The technology that supports it shouldn’t be, either.
This article is general information and does not consider the circumstances of any investor or constitute advice. No product mentioned in this article constitutes an offer or inducement to enter into any investment activity. Material published in SIAA Newsroom is copyright and may not be reproduced without permission. Any requests for reproduction will be referred to the contributor for permission.
