Michael Blomfield

Iress has announced that the next phase of its industry-wide Design and Distribution Obligations (DDO) solution will go live in September. This will integrate the DDO solution with Iress’ Xplan software to provide financial advisers and licensees with direct access to Target Market Determinations (TMDs) during the advice process.

The Xplan integration builds on Iress’ industry-wide DDO solution which enables product issuers to publish TMDs to the blockchain for product distributors to access, as well as manage reporting, complaints and significant dealings.

Iress’ chief commercial officer, Michael Blomfield, said: “The Iress DDO solution solves the regulatory challenge of the industry through a simple, trusted technology solution that increases data flow and productivity across the entire financial ecosystem.

“With the deadline fast approaching, Iress has seen strong demand for our DDO solution from across the industry, with more than 50 product issuers signing up to use our solution so far.

“Today’s announcement means that the TMDs of product issuers on the Iress solution will be seamlessly connected into the advice process of the thousands of financial advisers and licensees using Xplan. For product issuers, this increased connectivity will mean they can be more accessible to advisers and licensees and easier to interact with. At the same time, it will improve advisers’ efficiency and reduce risk for licensees that the DDO legislation may not be complied with.

“As we approach the commencement of the DDO legislation on 5 October,  the connectivity,  security and efficiency that Iress’ solution provides will enable each player in the financial services industry to meet their compliance obligations in a cost effective way and move forward confidently with the important work of serving their customers.”

Some of the organisations that have signed up to Iress’ DDO solution so far include fund managers such as Aberdeen Standard Investments, Fidelity International, GSFM, Pengana Capital Group, Schroders and Yarra Capital Management.

Anyone wanting more information on Iress’ DDO solution can visit www.iress.com/ddo .

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The Chief Commercial Officer will be responsible for Iress’ business growth objectives, including increasing growth at scale. The Chief Commercial Officer will report to the CEO and be a member of Iress’ leadership team.

Iress chief executive, Andrew Walsh, said: “I am delighted that Michael is joining us in this role. The new role reflects our focus on scale, consistency and delivery, particularly where clients have increasingly similar needs. We also continue to focus on improving the client experience and a focussed strategic approach to this is important to Iress and our clients.

“Michael is an experienced financial services leader with extensive international experience including in Asia Pacific, the United Kingdom and the US. This includes leading the equities division at Australia’s largest bank, Commonwealth Bank, as managing director for Asia Pacific for MF Global, and currently as the chief executive of research firm Investment Trends, which provides research and insights to financial services businesses in Australia, Asia, Europe, the US and the UK. Michael will bring a strong focus to sales capability and client experience supported by his international and industry experience.”

The roles and responsibilities of managing directors, who will report to the Chief Commercial Officer, are unchanged.

Michael will start in the role on 19 October.

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John Maroney

The superannuation landscape in 2030 will be the theme of the SMSF Association’s Thought Leadership Breakfast at the National Conference being held at the Gold Coast Convention and Exhibition Centre from 19-21 February 2020.

Association CEO John Maroney will be joined on the panel by Jeremy Cooper, Chairman, Retirement Income, at Challenger, and Michael Blomfield, CEO, at Investment Trends. Melinda Howes, General Manager – Superannuation at BT, will facilitate the event.

Maroney says: “It’s always a worthwhile experience to ‘crystal ball’ the future, especially in an industry such as superannuation where so often it seems change is the only constant.

“It will be particularly interesting to hear Jeremy’s views considering it will be a decade since he handed down his landmark report into superannuation. He will be in an ideal position to forecast future change from the vantage point of what has happened since his 2010 final report.

“Investment Trends have been at the forefront of research into the financial services industry, providing insights into market dynamics and industry trends, so Michael’s perspective on what the industry will look like in 2030 will also make for compelling listening.”

Other conference highlights include the specialist-only session, workshops that give members the opportunity to interact with speakers and their peers, as well as sessions about the latest changes to SMSF legislation and regulations, investment options, business practice and advice.

Maroney says the Early Bird offer to members closes on Friday (29 November). For further information and early bird registration, go to: https://www.smsfassociation.com/conference

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Michael Blomfield

Leading research firm Investment Trends has released its 2018 Planning Software Benchmarking Report, an in-depth study of the planning applications used by Australia’s financial planners.

The report benchmarks the key functionality of each application and reviews the direction of application development for financial planners and licensees.

XPLAN leads in Australian planning software benchmark rankings

Continuing its leadership in comprehensive planning application development, XPLAN topped the 2018 Planning Software benchmark overall rankings for the 12th consecutive year. XPLAN achieved top score in 29 of the 34 categories measured, maintaining its lead over other comprehensive planning applications.

Commenting on this result, Investment Trends CEO Michael Blomfield said: “In 2018, planning application development focused on implementing legislative changes to superannuation, improving adviser usability, and preparing for a post-Royal Commission financial advice landscape.”

The shift from modular advice process functionality continued to gain momentum. Planning applications are turning their attention to business and practice management, goal-based client discovery processes, and improving usability.

XPLAN also actively rolled out new functionality to improve the user experience and released their first CMS-based planning client portal to help advisers further develop their client service proposition and optimise efficiency in their practice processes.

Advice Intelligence and Milliman recognised for planning software innovation

Jointly recognised for innovation, Advice Intelligence and Milliman shared the Planning Software Innovation Award – for Advice Intelligence’s goals-based planning application powered by Milliman’s platform. “Their collaboration on a goals-based advice platform is seen as a progressive implementation” added Blomfield​.

Competition increases with the release of three new applications

While the vast majority of planners use XPLAN, COIN, AdviceOS, or AdviserLogic as their main advice delivery applications, competition is increasing. More recently, three new planning applications – CCUBE Integrated Wealth, Advice Intelligence, and Plutosoft – were delivered to market.

“Advisers have more options than ever catering to a diverse range of planning practice business models, helping improve every aspect of the advice process from client onboarding to ongoing engagement,” added Blomfield.

“These new third generation Australian planning applications reflect the shift to a goals-based advice process in tandem with the need to deliver enhanced process efficiency and compliance automation. The release of these comprehensive advice solutions present advisers with alternatives to the traditional propositions,” commented Blomfield.

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Meaghan Victor

State Street Global Advisors, the asset management arm of State Street Corporation yesterday launched a new SPDR ETFs/Investment Trends report revealing that, while the number of financial planners who recommended managed accounts has almost doubled in the last five years^[1] , more than 80 percent of potential users say they have basic or no understanding of the solution. ^[2]

According to the study, the rapid uptake of managed accounts in the previous five years is set to continue. Together with the 35 percent of participants who recommended managed accounts – up from 30 percent in 2018 – 31 percent of planners intend to introduce managed accounts in the near future. However, 40 percent of these potential users note that client education is one of the main barriers to entry.

“The number of planners recommending managed accounts reached the highest level ever in 2019 and there remains many more who are interested in the solution,” said Meaghan Victor, head of SPDR ETFs, Australia and Singapore. “These potential users have strong appetite to build their understanding further as they want to tap into the tangible benefits reported by current users. These include improved investment performance, transparency, enhanced client engagement, cost effectiveness and less administration.”

Michael Blomfield, Chief Executive Officer of Investment Trends Australia, said, “Those who use managed accounts recognise a wide range of client benefits. More than half believe transparency is the key attraction for clients3 and 30 percent report that following the implementation of managed accounts, investment returns achieved by their clients has increased.^[4] This is accompanied by 44 percent of users saying client engagement has increased.”

The survey also showed that 49 percent of financial planners using managed accounts reported a reduction in time spent on administration and compliance.^[5]

Victor added, “Compliance continues to play a central role in planners’ choice of managed accounts structure. The changes currently experienced by the industry, including regulatory changes, support the widespread adoption of Separately Managed Accounts (SMA) by planners. With 51 percent of financial planners saying they chose to employ SMAs because of the lower perceived compliance requirements^[6].”

For financial planners, the managed accounts ecosystem offers a suite of product selections to ensure each managed account aligns with the individual financial planner’s business challenges and goals. The research found that SMAs are favoured by the local planner community, with 68 percent of financial planners currently utilising SMAs on platform to implement managed accounts^[7] .

In addition, 76 percent of financial planners using an in-house Managed Discretionary Account (MDA), an alternate structure to SMAs, chose this structure because of the associated flexibility and control it could offer, further demonstrating that managed accounts offer benefits to both financial planners and their clients.

“Managed accounts are fast becoming recognised as a valuable tool; with 80 percent of planners who use managed accounts directing new business to these products in the last year. 8 Those who recommend managed accounts say 31 percent of their funds under advice (FUA) are currently in this product, on average, and expect this to grow to 52 percent by 2022.” Victor said.

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[1] Page 11, State Street Global Advisors SPDR ETFs / Investment Trends 2019 Managed Accounts Report
[2] Page 18, State Street Global Advisors SPDR ETFs / Investment Trends 2019 Managed Accounts Report
[3] Page 47, State Street Global Advisors SPDR ETFs / Investment Trends 2019 Managed Accounts Report
[4] Page 52, State Street Global Advisors SPDR ETFs / Investment Trends 2019 Managed Accounts Report
[5] Page 53, State Street Global Advisors SPDR ETFs / Investment Trends 2019 Managed Accounts Report
[6] Page 76, State Street Global Advisors SPDR ETFs / Investment Trends 2019 Managed Accounts Report
[7] Page 73, State Street Global Advisors SPDR ETFs / Investment Trends 2019 Managed Accounts Report
[8] Page 40, State Street Global Advisors SPDR ETFs / Investment Trends 2019 Managed Accounts Report

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The role of technology was a focus of the SMSF Week panel discussion.

The adoption of new technology and more education will be critical for the future of SMSF sector, according to an industry expert panel held as part of SMSF Week.

The thought leadership panel, hosted by the SMSF Association and the Australian Taxation Office (ATO), was part of the inaugural SMSF Week and regulators and included industry leaders from the ATO, the Australian Securities and Investment Commission (ASIC), Investment Trends, SuperConcepts, and OpenInvest.

John Maroney, CEO, SMSF Association led the discussion and highlighted the need for SMSF investors to seek more information, new technology and expert assistance in a climate of regulatory uncertainty.

“There is little point working hard throughout your life to maximise your retirement income through an SMSF, only to put it at risk because you don’t have an appropriate investment strategy or the right advice to manage longevity risk. Seeking expert assistance during all phases of your SMSF journey is important, especially during the transition to retirement and estate planning phases.”

The role of technology in the SMSF sector and superannuation landscape more broadly was a focus of the panel discussion.

James O’Halloran, Deputy Commissioner, Superannuation, Australian Taxation Office said, “It’s important for SMSF investors to accept technology as a useful part of their toolkit. Evolving technology will be able to provide real-time and event based information to SMSFs and lead to better decisions, but technology will never replace human judgement.”

Michael Blomfield, CEO, Investment Trends, said, “Technology will make it more convenient and cheaper to invest in an SMSF and that’s what we hope and expect to see in the future.”

Andrew Varlamos, Co-founder/CEO, OpenInvest, said, “New technology solutions are going to bring top tier investment management capabilities directly to investors, including SMSF trustees, in a user- friendly and engaging way.

“New solutions will provide ready access to diversified, multi-asset class portfolios managed by the word’s best investment managers, enabling trustees to obtain portfolio diversification that is appropriate to their circumstances, thereby providing them with the best chance of meeting their retirement goals.” said Mr Varlamos.

The panel also had a healthy debate around the future of advice within the SMSF sector. Unmet advice needs in the SMSF sector continue, with the ongoing challenge to encourage more SMSFs to leverage the wealth of information available.

Michael Blomfield said, “A lot of SMSFs think advice is too expensive and they don’t know who to trust to get it from. This is a challenge that goes beyond the current trust deficit in the financial services sector and we should be able to overcome it. “

Kate Metz, Acting Senior Executive Leader, ASIC, said, “There is a wealth of information available that is not advice, people can access information and insights on ASIC’s MoneySmart or ATO websites. We have no doubt that we will see more digital advice solutions relevant to SMSFs and we’re already seeing new ideas coming through ASIC’s innovation hub.”

James O’Halloran said, “People need to remember that the decisions you make today will impact you in 10, 20, 30 years-time. You need the right support and advice as early as possible.

“Creating an SMSF is not just an investment decision, there are serious trustee obligations. The seriousness of the decision for your future means it is critical to have advice. Due diligence and well- informed appropriate advice can protect SMSFs and their future, their family and retirement lifestyle.

“We understand that building trust and confidence in both the tax and super system is vital to the future of the SMSF sector,” said Mr O’Halloran.

Graeme Colley, Executive Manager, SMSF Technical and Private Wealth, SuperConcepts, said, “Accountants will continue to play a critical role in helping SMSFs navigate their path. Accountants should be directing investors where to seek advice and educating them on what insights they need.”

Regulatory Uncertainty

The panel also discussed the future of Limited Recourse Borrowing Arrangements (LRBA) and proposed changes to franking credits as examples of regulatory uncertainty for the SMSF sector. The discussion followed the revelation from a new report released this week from the SMSF Association, based on Investment Trends data that regulatory uncertainty is now the top cited challenge in managing an SMSF.

Kate Metz said, “We will be looking closely at one-stop-shops for property investment via SMSFs. We’re concerned that there is little to no discussion about how you use a property investment in retirement. Will it need to be sold and if so what if property market drops?”

Graeme Colley, said, “The majority of SMSFs are being discriminated against with the proposed changes to franking credits removal – we think it’s inequitable.”

Longevity Risk

With an ageing population and a generation of SMSFs maturing the panel also raised longevity risk within Australians’ retirement savings as a major challenge for the industry.

Michael Blomfield said, “There is not enough conversation about the need for liquidity in SMSFs approaching retirement. We have to find a way in a regulatory or policy sense to ensure liquidity sensibility to the way people can protect their retirement savings.”

“We need to look at SMSFs as a whole-of-life and intergenerational investment tool.”

Today’s panel event provided valuable insights into the future challenges and opportunities facing the SMSF sector and Australia’s retirement savings landscape more broadly.

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