One leading regional wealth manager explains why platform technology is becoming key to adviser professionalism.
As one of the leading financial consultancies in the South of England, the Jelf Group has always taken an active interest in seeing how it can incorporate technology to best effect across its business.
Having used platform technology since 2001, the firm took the decision in 2006 to use Cofunds as one of its strategic platform partners.
"We chose Cofunds as a strategic partner partly because it is independent and not owned by any single insurance company," explains Jelf's executive director of wealth management Mike Gough. "Also, it was able to integrate completely with First Software, our back office technology provider, so incorporating the platform into the business was relatively straightforward.
Thirdly, out of all the platforms available, we liked Cofunds technology best - it's neat and clear and we could see how it could evolve with our platform requirements."
There are 50 advisers and 120 support staff in the wealth management business at Jelf, all of whom are now using Cofunds, alongside other platforms, to manage portfolios and generate client reporting. "The platform is very intuitive so after initial training from Cofunds, it has subsequently been a case of us getting to know the system ourselves and seeing how it can support what we need to do," says Gough.
Some of the tools on Cofunds have proved particularly useful. "Tools like Morningstar X-ray offer a great way to communicate with clients, showing them how their portfolio is blended, down to the individual stock level. It's very beneficial to be able to discuss with clients exactly how their portfolio is constructed rather than just presenting them with performance numbers."
The firm uses Cofunds for all key product wrappers - pensions, ISAs, onshore and offshore bonds and collectives. "We really like the sheer breadth of funds on Cofunds which we've found to be wider than many of its competitors. We use third-party research to select funds for us and the recommended funds are generally already on Cofunds," Gough adds.
Today, around £200 million in wealth management assets is managed on platform at the firm. "Some clients have everything on platform and where that's the case, servicing them is a piece of cake," says Gough. "But many clients still have significant assets registered elsewhere so they are not yet getting the full benefit of having everything in one place.
"A key piece of work over the next few years will be to encourage clients to bring more legacy assets on platform so we can manage their portfolio with optimum efficiency."
Gough and his colleagues are keen to maximise the use of platforms, believing this technology will be key to survival as the Retail Distribution Review (RDR) forces change in the independent advisory sector.
"We think platforms will be essential post-RDR for two reasons," says Gough. "First, if advisers want to remain independent they need to be able to show clients that they are offering real advice, not simply selling products. So a firm needs to demonstrate exactly what their advice process entails."
"For that reason, platforms like Cofunds could be instrumental in offering front-end planning tools and presentation materials that an adviser can use with potential clients. It would be great, for example, to be able to present different planning scenarios in a highly visual way, showing investors how their money might be managed to achieve certain objectives."
"Second, if fees are going to be negotiated with the client, then advisers have to demonstrate that costs are properly managed. Platform technology reassures clients that their fees aren't subsidising inefficient business practices."
Looking forward, Gough and his team are keen to implement further platform functionality, such as online portfolio access for premier wealth management clients and electronic commission reconciliation.
Overall, Gough believes that life will become a lot tougher for advisers who don't use platform technology.
"Advisory firms need to show they have skilled advisers using the best tools and technology to give clients the very best advice. If you are an IFA of any significant size, I don't believe you can offer a service that clients will pay for unless you adopt platform technology."
Users of Intelligent Office
44% do not think technology will solve problem
Still under-serviced area of sandbox
Equivalent to AUS$25m