Alternative Universe - John Kim (Macquarie) and Arnie Selvarajah (Bell Direct)

John Kim (Head of Wealth Platform Delivery) of Macquarie and Arnie Selvarajah CEO of Bell Direct spoke on the evolving role of platforms and competitive administration services for advisers.

While everyone is familiar with how platforms have developed, John Kim talked about how platforms are becoming digital and how critical they would be in supporting the advice experience of clients. An open data based infrastructure would create a digital marketplace in which advisers and clients can transact and platforms would be central to this.

Services like portfolio management will become a commodity service and platforms will facilitate this.

Open banking protocols will mean that advisers and their clients can have a more complete view of the client’s whole financial circumstances, allowing advisers and clients to interact through a choice of channels. Open APIs, voice recognition, chatbots for routine functions and other emerging technology will all mean that routine functions can be commoditised and reduced in cost. More importantly the analysis of data will enable advisers to provide real time insights and experiences.

Arnie Selvarajah pointed out how technology moves in advance of the capacity of people to adapt their processes.

Bell Direct sees two key technology options for organisations like Bell Direct in meeting the needs of advisers – the “providers” of best of breed technology and the “facilitators” who combine providers into a coherent service offer for advisers. Drawing on the US experience, roboadvice has been used successfully by incumbents rather than disruptors, in part because they were looking to reduce their costs to acquire and serve clients. But human advisers are responding by moving towards goal based advice and the use of alternative investments because of the state of the markets. Technology is improving the client experience and deepening the advisers ability to segment their service to clients based on their the capacity and needs.

These trends are leading to falling costs and falling revenues, which taken together mean a gentle decline in margins.

So the Bell approach is a partnership approach that replicates what is happening in the US. Arnie cited US examples of model marketplaces provided by several organisations. Key feedback from Australian advisers is the complexity of the investment decision making process given the state of the market, the need for digital service provision for efficiency and client’s desire for greater transparency of fees and understanding of where their investments were held.

In response to this, Bell is offering an investment committee and a number of managers to advisers who want to use individual HINs, automated ROAs, automated rebalancing and centralisation of the administration process.  

So, although approaching advisers with very different service offers, Macquarie and Bell Direct share a common belief in:

• Digital delivery of service through multiple channels across the whole of personal wealth
• Dramatic falls to come in the cost of delivery of portfolio management and other services
• “Always on” as an attribute of the client experience
• The need for a facilitator to deliver a complex technology infrastructure