Many advice firms recognise they would benefit from streamlining their clients onto one, two or three platforms, allowing them to increase business efficiency and profitability, however they are instead stuck with their client book spread across many legacy platforms.
There are a number of reasons for this platform proliferation. We have seen large a number of advisers leaving the industry with other advice firms buying their client books, increasing merger and acquisition activity among the advice firms that remain, and many new administration platforms entering the market.
But increasingly the result of this platform proliferation is that the Best Interest regulatory environment instead becomes focused on a price interest.
Quite simply, the regulatory requirement is for advisers to assess and evaluate the costs and benefits of different platforms for their clients. If platform fees aren’t competitive it is important for the adviser to demonstrate that the features and benefits of a particular platform make the extra cost of transferring to that platform worthwhile.
Until recently, however, the problem was that none of the product comparison technology enabled a detailed and comprehensive view of platform and investment management features and benefits – they were specifically fees based (and even those were not being calculated properly, particularly where rebates, fee aggregation and other new product fee arrangements appeared / existed).
Overwhelmingly, the focus for these comparison tools has been on price interest rather than both the price interest and benefit interest of moving clients onto new products. Many advice firms of all sizes are then left dealing with having their clients spread across multiple platforms.
This has created an incredible amount of inefficiency for firms at a time when the cost of advice is skyrocketing.
No advice firm wants to unnecessarily access multiple platforms for client portfolios, but because of regulations - such as the Best Interests Duty - many advice firms fear they will create compliance issues by shifting clients from legacy platforms.
It is notoriously difficult to change platforms and even when an advice firm does decide to transition it is frequently done through an internal team who aren’t experienced in completing the necessary transition documentation or project managing the transition – so it is rarely successful.
Internal teams tend to view change management as an administrative task, rather than something that can actually improve the advice given to clients.
However the launch of Padua’s ‘Compare’ product research comparison software in 2022, followed by two new transition management software applications that run alongside its flagship ‘Transition Manager’ system have enabled Padua to solve the transition puzzle.
Compare enables financial advisers to accurately compare their client’s existing platform(s) and underlying investment options to their platform APL and underlying investment portfolios or strategy.
Meanwhile Padua’s new Transition Management Service – called Ready, Set & Go is revolutionising the platform transition process. This takes in:
- Ready - Book Analysis
- Set - Client Segmentation
- Go - Implementation
When we consult with advice firms, we view transition management services as a complete program that aims to improve every aspect of how the firm is run from top to bottom. This includes enhancing the quality of their CRM data and moving to a new platform technology or investment strategy which will deliver cost, features, and scale benefits to both the advice firm and their clients.
Padua’s Transition Management Service is able to produce over 12 transition packs per day per transition team member. The transition pack not only includes the advice document, but any document required by the advice firm to complete the client transition (including transfer authority, application form, in-specie documentation etc). The technology does the heavy lifting, and multiple team members review the transition packs to ensure high-quality, compliant output.
Increasingly, once advice firms realise multiple platform changes this can be done in a high-quality, efficient and cost-effective manner using a transition partner, they are more likely to consolidate clients onto their preferred platforms and investment portfolios.
Through the Padua Transition Management Service, advice firms are able to change platforms and investment strategy simply and easily, improve the quality of their advice, and refining the quality of their client data, thereby creating a more efficient, value-creating advice practice.