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Switching platforms might be a complex task

Matthew Esler, co-founder of Padua Solutions, told Financial Newswire’s Platforms, Wraps and Advice Technology conference held last week in the Hunter Valley that only 20 to 25% of advisers who declare that they would like to switch to a new platform actually makes a move within 12 months.

Part of the problem is a huge amount of data and insights in the industry that comes from ‘all the surveys’ but is not ‘real data’.

“You’ve got to have real data to make real decisions and we often jump on shadows in this industry based on market research,” he said.

Padua’s co-founder and Matt’s sister, Anne-Marie Esler, pointed to the Padua’s research, which underpins its transition management service, and has been built over a 10-year period, using the data collated from producing “thousands of advice documents every year”.

“Our research proposition, in terms of the platform universe, covers over 1,000 platforms and that spans super, pension, investment, master trust , industry funds and wrap accounts so we have a fee and feature data for over a thousand platforms in the industry.”

However, at the same time, Anne-Marie Esler stressed it was difficult to capture very single fee type in the industry. Matt and Anne-Marie both believed that due to complexity of fee structures at different platform providers, advisers who were not using “this kind of software” would need to contact people from platforms as only these people were the only ones able to calculate platform fees correctly.

“And there is a case of transposing those fees into the SOAs documents,” Anne-Marie Esler added.

According to Esler’s duo, the main reason why Padua has been hired by platforms, business and management consultants was because it was able to “actually move money” and bring all the data together.

Matt Elsner said it was the area where “no one was doing this” and mentioned that the transition teams in platforms were previously doing this only at the top end, leaving ‘everything in between’ for advisers to deal with.

“And everything in between is extremely complicated, everyone says it’s just moving a platform, it is easy, but there is so much going on in advice practice and inside the advice firms that there is no way [thinking about moving money] is [advisers’] first idea.”

Therefore, Matt Esler said, Padua also offered to analyze client books which served two purposes. Firstly, he said, this would show advisers how many of the clients within their book can actually move but, at the same time, it does pick up “a number of flags” why other clients should not move and stay exactly where they are.

The other thing that this process does is that it cleans up the practice book and provides a report showing every data point within the adviser practices’ CRM and how many holes there are in it.

“It is incredibly important then to be able to enhance the quality of data and push that back into the CRM. We know what data is missing on each client, and adviser can click on each client and see exactly what data is missing, so the benefits of that client segmentation tool is that it collects all of that data, it puts it out visually so you can see all the exceptions but then it is segmented so the advisers can decide: ‘I will move the clients with the biggest balances first or I will move the clients who have the biggest fee benefits first. Or I will move those clients who are the easiest who don’t have any of the flags’.”

“What they [advisers] want to know is can I do it [move clients to a new platform] or not? Give me easy visual guidance on this, and sometimes they cannot, after we looked at all the flags, and we would tell them: you shouldn’t actually move this money. If you move this money, it is going to be detrimental to the client.”

The original article by Oksana Patron, Financial Newswire can be viewed here:

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