We can’t afford to wait for the Royal Commission to release its final report next year before taking action.

Tackling the trust issue is one of the greatest challenges currently facing our industry. Peter Malekas explores practical ways for advisers to turn the tide.

We are experiencing a national crisis of confidence in our institutions. Our trust in business, government, media and non-government organisations has fallen drastically in the past year, and signs point to it getting worse before it gets better.

Australia is among the countries to have experienced an extreme loss of trust in the past year, with public trust in our institutions plummeting by a total of 10 percentage points between 2017 and 2018, according to the Edelman Trust Barometer.

The financial services sector was the second least-trusted industry in Australia, Edelman reported, with only the energy sector ranking lower.

Those results reflected public sentiment before the financial services Royal Commission began. Since then, the serious and widespread issues revealed by its hearings have sparked consumer outrage, government condemnation and media scrutiny.

Time for change

Those who have been part of the problem will need to face the consequences of their behaviour or inaction.

The rest of us need to be part of the solution. We can’t afford to wait for the Royal Commission to release its final report next year before taking action.

Rightly or wrongly, consumers are likely to see reluctance to change the status quo as tacit support for the issues that have been exposed. Most people (65%) say CEOs should lead change rather than waiting for the government to impose regulations, the Trust Barometer reports.

Financial planners face a greater challenge. Unlike retail banks and energy providers, they provide a discretionary service, making them more vulnerable to consumers voting with their feet and opting not to seek advice.

Raise your voice

People still want something – or someone – to believe in. With trust in institutions falling, individuals are gaining greater influence as voices of authority. Technical experts and academics have significantly higher credibility than institutions, and the gap is continuing to expand, according to the 2018 Edelman Trust Barometer.

At the same time, the advice market is continuing its move towards higher professional standards with consistent education and ethical requirements.

Advisers who demonstrate their competence can become powerful advocates for their own business. Whether it’s helping people develop greater financial literacy, demystifying industry jargon, or explaining how beliefs and biases can help or hinder achieving financial goals, sharing knowledge can be a powerful marketing tool.

Simply sharing useful, credible information from independent researchers and industry experts across your social networks can be a way to get started.

Be an open book

Transparency is a critical part of building trust. That means proactively providing the answers people are looking for before they have to ask.

Advisers need to go out of their way to satisfy their clients’ potential concerns.

That may mean advisers adopt an increasingly active approach to disclosing their structure and ownership, independence, remuneration structure, policy to address conflicts of interest, and investment philosophy. Millennials, in particular, aren’t averse to asking these hard questions of their advisers. They may not be all advisers’ clients today, but they will be in future.

To have the answers, advisers first need to ask themselves the tough questions. Are there changes they should make to meet clients’ expectations?

Being transparent also means making information easy for clients to understand. The top ranked factor that increased trust in financial services was having terms and conditions that were easily understood, according to the Trust Barometer.

Show, don’t just tell

Building trust and demonstrating value calls for action as well as words. Technology can help on both fronts.

People increasingly expect technology to be part of financial solutions. According to the Trust Barometer, 79% say it’s important for a financial services firm to use the latest technology.

However, clients are clear that technology plays a supporting role and personal relationships are front and centre. Nowhere is that more important than in the advice industry. Getting investment advice was rated as the most important financial service to be provided by a real person, according to Edelman’s survey.

Smart tools and increased process automation free up valuable time for advisers to spend interacting with clients. They can also make it easier for advisers to present complex concepts to clients and bring financial plans to life.

Using data analytics and open architecture, solutions can deliver real-time insights into clients’ actual financial situation and behaviour. Advisers can use this to model the dollar impact that even small changes can have to reduce debt or increase wealth, showing tangible value based on reliable information.

Further industry upheaval is likely to be inevitable as the Royal Commission continues to play out. Advisers who embrace the change stand to emerge stronger and more resilient, equipped to navigate the uncharted waters ahead.

Link Group has an investment interest in Moneysoft.

By Peter Malekas, founder and managing director.

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Peter Malekas

Financial planners need to broaden their role and help clients understand their household expenses in the wake of the Royal Commission’s damning revelations.

Australian households have racked up record levels of debt as interest rates have been cut to historic lows in recent years, but the Commission heard that most lenders still over-rely on the poverty-level HEM benchmark that underestimates true living costs.

“The Financial Services Royal Commission has raised many disturbing issues across the banking and advice industry. It will inevitably lead to widespread and much-needed reform,” said Moneysoft CEO Peter Malekas.

“However, we shouldn’t wait for the final report in 2019 to reassess as an industry, what we do and how we can better serve clients now. Cashflow management and budgeting are within the top unmet advice needs of everyday Australians, according to Investment Trends research. However, many financial planners are still concerned about turning that demand into a sustainable and scalable service.

“Technology has solved both of those issues, allowing financial planners to add a ‘cashflow as a service’ element to their ongoing client packages. This shows ongoing value to clients who can learn to understand and control their expenditure, building a solid financial foundation.”

Without the guidance of a trusted financial planner, many people’s debt woes are likely to grow. Australians’ household debt to income ratio now stands at a record 188.6%.¹ Around three in ten households (29%) were classified as ‘over-indebted’, with mortgage holders and high-income earners particularly susceptible, according to ABS data released in late-2017.

The head of the Royal Commission, Kenneth Hayne, has also acknowledged concerns about people’s ability to understand their own expenditure before making major financial commitments such as a mortgage.

“In light of the evidence that has been given, I think, by a number of witnesses, that by and large customers are poor historians when it comes to identifying their outgoings,” he said at the conclusion of round one of the hearings.

“People are not very good at providing the information, not for want of trying, not for want of prompting, just by and large people are poor historians. What does that say, if anything, about judging home loans on a measure of UMI [Uncommitted Monthly Income]?”

Moves are already afoot for financial planners to take a broader advice role beyond investments and insurance.

Earlier this year, a Productivity Commission draft report into competition in the Australian financial system raised the prospect of financial planners providing advice about credit-based products, including mortgages, without the need for a separate license.

Last year, the now former CBA chief executive Ian Narev proposed “the potential extension of regulations such as future of financial advice to mortgages in retail banking” in a letter to the Retail Banking Remuneration Review.

Moneysoft offers low-cost technology solutions that are easily accessible to advisers: Moneysoft Pro and Moneysoft Lite to help automate and build a sustainable service by cutting lengthy manual data collection and data entry requirements. Both solutions are built on a platform that easily integrates with a range of popular financial planning software such as XPLAN, which provides clear benefits around efficiency and compliance.

Simon Rayner, a financial planner at Dynamic Orange, says money management has traditionally been missing from the advice industry.

“Our industry jumped over the cash flow and having a plan that was tracked against real data and instead sold product. But this is really the core part of what we should be doing – managing cash flow – because that’s how clients make money.”

He says he recently helped one professional couple cut frivolous and unplanned expenditure, helping them save $17,000.

“They can now afford a full plan that involves overseas travel, purchasing another property – and they know exactly when they’ll own their own home. We’ve done their insurance, super, estate and wills, and will refinance their loans when they come out of their fixed structure. Initially the client had no savings and after three months of using Moneysoft we implemented a strategic plan that will produce over $7,800 in revenue for this practice.”

Moneysoft Pro delivers a complete financial money management service that enables deeper client conversations. It includes budgeting and cashflow, a full range of financial reports, real- time data, goal tracking, and account alerts. Moneysoft Lite offers a more cost-effective and streamlined money management solution that includes a financial health check and gap report.

1. RBA Household Finances – Selected Ratios – E2. https://www.rba.gov.au/statistics/tables/

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Peter Malekas

Moneysoft has re-launched its client engagement and financial wellbeing platform with a more intuitive and streamlined user interface that cuts the time it takes professionals to analyse their clients’ key financial data.

The launch follows a 12-month research and design process including extensive interviews and testing with a range of financial professionals who use Moneysoft’s personal financial management tool.

Founder and Managing Director, Peter Malekas, said that seeking feedback is central to Moneysoft’s ethos of ongoing product and customer service improvement.

“We encourage our users to tell us the features they’d like to see next, so that we can focus on making improvements that deliver the biggest impact to their businesses,” he said.

“The improved design includes some completely new features which enhance the client service provided by professionals such as financial advisers and mortgage brokers. This functionality will lead to stronger engagement, cementing the value of advice and helping clients make lasting changes to their financial behaviour.”

The upgraded Moneysoft platform delivers a smoother, faster on-boarding process to advisers, brokers and their clients. Improved back-end reporting makes it easier to keep track of clients.

Clients will also benefit from new dashboard reporting which makes it easier for them to see a snapshot of their overall financial position. They can now also recategorise multiple financial transactions at the same time, perform category searches more easily, and quickly view and edit notes.

Current Moneysoft users will be migrated to the new UI platform over the next six months, while new users are already using the new interface.

“Moneysoft has an ongoing commitment to continue improving our world-class platform and the relaunch of our UI is just the first stage,” Malekas said. “Plans are already underway for the next round of upgrades, which includes greater customisation and in-app messaging.”

Moneysoft’s personal financial management platform was launched in 2012 and is now used by financial planners and professionals across 15 dealer groups and institutions. A key attraction is Moneysoft’s open API architecture, which allows it to be integrated with a range of other software including XPLAN, Prospera, Investfit, Xeppo, Bill Butler and FinPal. This has seen Moneysoft recognised as a finalist in the Fintech Business Awards for the second year in a row.

Moneysoft’s proprietary platform reveals a client’s entire wealth position by seamlessly bringing together and analysing their cash flow from disparate sources, providing valuable insights into spending patterns and trends. This information underpins better advice and strengthens client engagement, as well as providing a new income stream for professionals who can help individuals to manage their cashflow.

Advisers can select from, or combine, two solutions to suit clients at different stages of their wealth journey. Moneysoft Lite provides a robust financial health check process, while Moneysoft Pro supports clients who want to take a more hands-on approach to managing their money.

Last year, Moneysoft also launched Round-ups, which allows fund managers and superannuation funds to encourage small, regular contributions by their clients by from the spare change from electronic purchases.

Global fund administrator and share registry service provider Link Group took an equity stake in the company in October 2016.

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Peter Malekas

Moneysoft has appointed eight new staff in response to growing demand for its suite of personal financial management solutions.

This expansion boosts Moneysoft’s frontline account management and client service teams including increased support capability.

It follows strong uptake of the company’s core cashflow as a service software and the recent launch of its Round-ups solution. The new appointments are in account management, product development and support, as well as new hires in the sales team.

Moneysoft’s Australian team now numbers 18 full time staff.

In addition, Moneysoft has increased its offshore capability with nine additional staff in Europe dedicated to mobile application design, development and testing.

“Moneysoft has grown rapidly over the past 24 months, which has allowed us to make this significant reinvestment in the business,” Moneysoft managing director and founder, Peter Malekas, said.

“This will support our growth, and more importantly the growth of our customers, by continuing to develop market-leading technology, solutions and capability over the coming years.”

“Our industry is being transformed as a wave of technology changes the way we work. It can empower the public and provide significant productivity gains to businesses.

Moneysoft is committed to helping financial advisers, mortgage brokers, and super funds meet these challenges.”

The launch of Round-ups, which allows superannuation and investment funds members and clients to boost engagement by easily investing their spare change, builds on the company’s growth trajectory over the last 12 months.

Moneysoft’s cashflow as a service solution is already used by 15 dealer groups, distributors and resellers and is the only such service that integrates with iress XPLAN, a leading CRM and financial planning tool.

The company’s growth strategy is supported by a significant investment made in October 2016 by Link Group, a global fund administrator and share registry service provider.

Moneysoft plans to continue adding new resources which will allow it to continue providing superior and innovative products and enhancing market-leading customer service.

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Peter Malekas

Moneysoft has struck new deals to integrate its cashflow as a service solution with goals based advice software Investfit and software data connector Xeppo.

The partnerships bring together powerful technology and the capability for financial services providers to offer customised solutions that meet the individual needs of their client base.

Moneysoft founder and managing director, Peter Malekas, said the integrations will unlock new insights for financial services businesses, supporting deeper client engagement while also identifying future leads and increasing efficiency.

“We’re putting control back into the hands of funds, advisers and brokers to say what they want to achieve and how they want it to look and feel. These new integrations mean we can develop customised solutions that incorporate their existing platforms, providing a seamless client experience.”

Xeppo, developed by Adelaide-based Opex Consulting, connects information from across existing platforms to give advisers, wealth managers and accountants a holistic view of their entire client base.

“The integration with Moneysoft brings in new information about clients’ assets and liabilities. When that’s combined with data from the other systems a practice uses, it gives a complete picture resulting in a stronger ability to understand their clients and provide tailored recommendations,” said Opex Consulting managing director, Paul Campbell.

The integration is made possible by Moneysoft’s open architecture, which enables it to work seamlessly with other platforms.

The financial services sector is undergoing a period of innovation driven by low-cost cloud computing and a broad endorsement of open data principles, including by the Productivity Commission and a lower house government committee.

“Open data empowers consumers with greater control over their information, helping them drive their financial wellbeing – that’s at the heart of what Moneysoft is all about,” said Jon Shaw, Moneysoft’s head of technology and operations.

“Moneysoft was built from the ground up with open APIs (application programming interfaces), which allows us to offer scale and efficiencies without the need for businesses to completely overhaul the way they work.”

Investfit allows advisers to seamlessly collect and feed information about a client’s financial position into their actuarial goals-based analysis.

Investfit co-founder Ed de Salis said, “Combining Moneysoft’s real-time data on client spending patterns with our real-time modelling underpins robust asset and investment recommendations. Integrating the two will save advisers time and reduce manual processes.”

The integrations with Xeppo and Investfit follow last month’s announcement of Moneysoft’s partnership with financial planning software FinPal to extend and streamline their software.

These latest deals bring the total number of companies that have integrated Moneysoft technology and its range of solutions into their own platforms, to eight. They include XPLAN, Link Group, Prospera, FinCoach Australia, Bill Butler and FinPal. The users of these integrations are wide-ranging and include Mortgage Choice, Clearview, RI Advice and more.

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Peter Malekas

Leading personal financial management (PFM) software provider Moneysoft has launched a complete package of resources and tools to help financial advisers introduce an effective, profitable budgeting and cashflow management service to their clientbase.

Developed in conjunction with advisers, the Moneysoft Business Processes toolkit contains a series of eBooks, video tutorials, blogs, and client-facing brochures and templates. It is a complete, step-by-step guide on how to build and deliver a relevant goals-based, money management proposition; how to grow and diversify practice revenue; and how to achieve a deeper client engagement through “cashflow as a service”.

According to Peter Malekas, managing director of Moneysoft, the ready availability of cloud-based Software as a Service (SaaS) solutions meant advisers had affordable access to world-class tools, however, many didn’t know how to go about utilising the software and integrating it into their processes.

“It’s one thing to have the technology to support a highly automated goals-based savings, budgeting and cashflow management proposition but if advisers don’t know how to get the most out of it or how to develop and market their services the whole exercise can be frustrating and fruitless,” he said.

“Our team has spent the past year talking to advisers about how we can help them. This led us to put together an end-to-end package on how to integrate Moneysoft into their practices, how to articulate and demonstrate the benefits of cashflow management, how to build their service offering, and how to price it for new and existing clients.”

In addition to the Business Processes toolkit, Moneysoft is also helping advisers to promote their cashflow proposition online and seamlessly onboard clients via straight-through-processing. Using their technological expertise, Moneysoft has developed a landing page with a sign up function, which advisers can embed into their existing websites.

Moneysoft’s suite of resources is available to all advisers who have a Moneysoft Business Account.

Moneysoft’s head of marketing Neil Debeger said that the appetite and demand for cashflow services was growing however advisers were increasingly time poor and resource constrained.

“We’ve been building a bank of resources to complement and support our innovative platform because we want to make the advice experience more enjoyable and profitable for both advisers and their clients,” he said.

“Our goal is to partner with advisers by providing clear and structured process guides, marketing collateral that they can easily rebrand and ongoing blogs, thought leadership and practical tips.”

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Peter Malekas

Financial advisers now have access to a new benchmarking and reporting tool, giving them unique insight into the spending habits of their client base and the ability to compare the financial behaviour and performance of individuals against their peers.

The innovative comparison tool is integrated into cashflow, budgeting and savings management platform Moneysoft and is available free to Moneysoft business account holders. It aims to foster deeper client discussion, engagement and understanding.

The tool divides clients into three broad categories: singles, couples and families, allowing them to compare their financial position and behaviour relative to their peers in real time and over a period of time.

Advisers can also generate personalised reports including a ‘Budget versus Actual’ report and a ‘Spend Analysis’
report.

According to Peter Malekas, Moneysoft managing director, being able to show people exactly what their peers are
doing with their money is an extremely powerful and motivating tool.

“While everyone is running their own race, the fact is many people are concerned about ‘keeping up with the Joneses’ and it’s human nature to be curious about what others are earning, saving and doing with their money,” he said.

“Equally, people should know and be encouraged if they’re doing relatively well when it comes to their money
management goals. This tool gives them insight into the financial behaviour of other singles, couples or families, and further strengthens the advice conversation around cashflow and budgeting.”

The new service, which was developed in collaboration with Steve Crawford, of Experience Wealth and Your Spending Coach, was designed to allow advisers to deliver even more value to their clients’ money management process.

“The biggest value of having a peer group to compare your results, is that it gives your clients a perspective outside
their own world, that is taken from other people just like them” Crawford said.

“This perspective is especially valuable to clients when it comes to making big decisions like changing and needing to reduce lifestyle spending to increase savings so they can achieve a goal, for example a new property or to
accommodate for maternity leave.”

Malekas added that Moneysoft’s new comparator tool enabled practices looking to add a money management offer,
to benchmark the performance of individual clients using their own data, as well as the ability to use alternative
proprietary data sets, to create a tailored service to suit their own or their practice’s requirements.

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Peter Malekas

Advisers can now automatically track their clients’ bank, superannuation and investment account balances, determine the optimal way to invest funds and monitor a client’s financial progress with a new integrated money management, debt recycling and strategic advice platform made possible by the collaboration of two leading fintech companies.

Cloud-based technology providers Moneysoft and Prospera have teamed up to integrate Moneysoft’s budgeting and cashflow management tool with Prospera’s financial modelling and real-time portfolio tracking service, following strong adviser demand for an efficient, end-to-end solution.

Prospera co-founder and head of development, David Dye said the streamlined solution eliminated the need for advisory firms to manually gather and enter client account balances every month because the process was now automated. It ensured advisers had accurate, up-to-date data which allowed them to focus on financial modelling, determine the optimal way to invest a client’s money and track their progress towards their goals and objectives.

“Prospera’s main purpose is to find the best use of a client’s surplus cashflow whether that be to pay off the mortgage, top up their super, invest in a retirement income stream or a combination of all three. In order to implement a robust financial plan, advisers need accurate data, which is why the combination of Moneysoft and Prospera is so powerful,” Dye said.

“Moneysoft tracks a client’s income, expenditure and cashflow, then Prospera takes that data and works out how best to invest a client’s money in line with their risk profile and goals.”

Peter Malekas, Moneysoft managing director said a key benefit of the integrated solution was that it clearly delineated the role and responsibilities of an adviser from those of a client, ensuring that both parties were accountable for their actions.

“This technology makes it clear what clients need to do and what an adviser will take care of,” he said. “Basically, clients need to save, budget and set goals, and if they do that, advisers will be able to implement an appropriate strategy to maximise the probability of them achieving their goals.

Advisers can’t do their part if clients don’t keep their end of the bargain.”

Malekas added that the partnership between Moneysoft and Prospera was driven by adviser demand for a solution which boosted practice efficiency, transparency and client engagement while enabling real-time tracking.

“There’s nowhere for clients to hide with this solution,” he said.

“Advisers will be able to say to clients, ‘you said you were able to generate $30,000 of surplus cashflow but I can see that you only have $15,000 of cashflow’. They’ll be able to challenge clients about how committed they are to achieving their goals, given the evidence of their saving, spending and priorities will be apparent.”

Around 24 financial planning practices have already trialled the integrated offer as part of a pilot program but the solution is now being made widely available to all financial practitioners.

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Peter Malekas

Financial planning practices aligned to 17 of the top 50 dealer groups nationally have integrated an innovative new budgeting and cashflow management solution into their advice processes, following a successful pilot program by dealer group RI Advice late last year.

Moneysoft, the new cloud-based wealth management service launched by entrepreneur, accountant and former financial planner Peter Malekas, is being rapidly adopted by advisory firms aligned to some of the country’s leading licensees including Financial Services Partners, Godfrey Pembroke, Matrix Planning Solutions and Charter Financial Planning.

According to Malekas, there’s also a healthy pipeline of new business as adviser demand for effective client engagement tools continues to grow.

“Consumers are increasingly interested in how to manage their money. They don’t want to be told what to do by an adviser but rather they want to be actively involved in the decision-making process,” he said.

“By giving people the tools to effectively budget and manage their cashflow, oversee their total financial situation, observe spending habits, track the performance of their assets and monitor their financial progress or deterioration, advisers can empower clients to make smarter financial decisions and be accountable for their decisions.”

Jason Andrew, director of RI Advice practice Empowered Financial Partners, said the Moneysoft solution had become an integral part of the group’s advice process with every new client introduced to the program. Over the next 12 months, Moneysoft will also be rolled out to existing clients.

“We’d been looking for an effective, adviser-friendly budgeting and cashflow tool for five years, and we’d almost given up and decided to build our own when we were asked to participate in a pilot program for Moneysoft,” Andrew said.

“Since then it has become a key part of our processes. It captures real data so when we examine a client’s spending and cashflow, and forecast the probability of them achieving their goals based on those figures, they can’t argue with that.”

Mr Malekas added that the Moneysoft solution was helping advisers connect with new and existing clients on a deeper level which was critically important in an increasingly competitive environment.

“It’s interesting how something seemingly as simple as a budgeting and cashflow management tool is allowing advisers to reach more new clients while strengthening their existing relationships,” he said.

“Advisers have told us that by using Moneysoft they’re able to have deeper client conversations that often result in clients adjusting their financial behaviour, ultimately leading to improved client outcomes.”

Unlike other online wealth management solutions which target consumers directly, Moneysoft is assessable primarily through financial planners. Mr Malekas said this important distinction acknowledged the invaluable and essential role that advisers played in helping guide and support their clients along their financial journey.

“Moneysoft is designed to help advisers engage with their clients. The solution allows users to aggregate their financial information in one place, ensuring that advisers and clients are working off the same information and any strategic plans are tailored to the client’s unique situation and not hypothetical numbers,” he said.

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