Flexible and configurable technology is crucial as advisers face Future of Financial Advice (FOFA) reforms and the possibility of a Liberal federal government making radical changes to opt-in and fee disclosure.
GBST Wealth Management executive manager Nick Frolich said any software hoping to compete in Australia's highly competitive financial services sector must be open, modular, able to track legislative change almost instantly, and have a very short time-to-market framework.
In launching the latest version of GBST's Composer FOFA-ready platform at yesterday's 12th Annual Wraps, Platforms and Masterfunds conference in Brisbane, Frolich said that the openness of the platform enabled it to be changed "very rapidly" if the legislation was changed.
Frolic said research with Composer users had shown opt-in administration was one of the most important features on a platform, with fee disclosure also important.
Another administrative difficulty for advisers was in geared or borrowed amounts, he said.
The prospective ban on asset-based fees applying to borrowed, or geared, investment amounts would apply only to that portion of the investment which was borrowed - and hence, not the investor's capital contribution.
This ban would not apply where a product was "internally" geared or the portfolio had a level of gearing instituted by the product manufacturer.
The implementation of this restriction could be problematic if an adviser wanted to charge an asset-based fee on the investor's capital contribution, but not on the borrowed amount - because sources of borrowing could be varied: margin lending facilities, personal loans, equity lines of credit and other vehicles.
Frolich said the difficulty was in the timeliness and accuracy of the data recorded because the level of borrowed funds could change daily, depending on capitalisation of interest and repayments and further draw-downs.
