July 3, 2019
Financial planners have indicated that compliance burden remains their top challenge, according to the latest findings from research firm Investment Trends.
Its 2019 Planner Technology Report surveyed 1,030 financial planners to gain an insight into their technology needs.
Following compliance burden as the top challenge planners said they faced (70 percent cite this), the provision of affordable advice is also a growing priority (43 percent, up from 33 percent in 2018) as is reducing the cost of advice (39 percent, up from 27 percent).
“Financial planners are striving to widen their pool of eligible clients as a host of macro challenges impact their bottom line,” said Recep Peker, Research Director at Investment Trends.
“For years, planners have struggled to grow their client base as they face a shifting regulatory landscape, the reputational impact of the Royal Commission and uncertain market conditions. In their quest to lift client numbers and practice profitability, more planners are focused on lowering cost and serving clients in an affordable manner,” explained Peker.
“Planners will be evaluating their technology partners, licensee and product set more critically than ever as they seek solutions that best meet the needs both of their clients and their practice.”
Highest rated platform
The report also measures planner satisfaction with their primary platform across 34 individual service areas, including their overall satisfaction.
Netwealth remains the highest rated platform by overall satisfaction this year, with 55 percent of primary users rating their overall satisfaction as ‘very good’, ahead of HUB24 (43 percent) in second spot.
The top five platforms by overall satisfaction are:
3. Asgard eWRAP
4. CFS FirstChoice
5. BT Panorama
“While many platforms continue to maintain high user satisfaction, industry wide overall satisfaction has declined to a seven-year low,” said Peker.
“While many platforms continue to maintain high user satisfaction, industry wide overall satisfaction has declined to a seven-year low.”
“Planners are demanding more support from platforms, and their support needs go beyond custody and reporting. In fact, over half of planners (54 percent) are willing to pay their main platform more to access better support in their practice and personal development, highlighting the opportunity for platforms to expand their value proposition.”
In the planning software space, AdviserLogic tops the leaderboard in overall planner satisfaction for the fourth year running, ahead of XPLAN and Midwinter.
The report also found that planners are consolidating the platforms they use. In 2009, planners used 3.5 platforms for new client inflows, on average, versus 2.1 in 2019.
“The platform landscape is changing at pace. Post-Royal Commission, the most cited platform selection driver is now fees, with low overall cost to clients (57 percent) overtaking efficient admin (45 percent),” said Peker.
“In addition, industry super funds are growing their usage among planners, with 9 percent of planners allocating client inflows to industry super fund platforms collectively in 2019,” he added.
“As competition intensifies, it is increasingly important for platforms to strengthen their planner relationships since the primary platform captures over twice the FUA allocated to the secondary platform (56 percent vs 25 percent, on average).”