Planners are focusing more on life insurance and expect this to continue over the short term

Recep Peker

The proportion of planners advising on risk has remained steady at 90% over the last 12 months, and those who do are sourcing a greater proportion of their practice revenue from providing risk advice (29%, up from 27% in 2013). Looking forward, planners expect this trend to continue with risk advice accounting for 31% of their practice revenue by 2017.

“Risk continues to be a key component of many planners’ businesses,” said Investment Trends Senior Analyst Recep Peker.  “Providers can help facilitate planners’ intention to grow their risk business by addressing some of planners’ key challenges, chiefly high premiums, administration issues and inefficient processes.”

Planners are expanding the range of insurers they use, but switching remains high

After four years of planners consolidating the number of insurers they use, planners have started to expand the number of insurers they use. The typical planner now uses 3.7 insurers each, up from 3.4 in 2013.

However, levels of insurer switching remains high with 40% of planners saying they stopped using at least one insurer in the last 12 months, up from 35% last year.

“Insurer relationships are in a state of flux,” said Peker. “Planners are aggressively expanding the number of insurers they use, while cutting those who aren’t exceptional. There are great opportunities and risks for insurers to either benefit or lose out from this switching.”

Despite insurer relationships changing rapidly over the last 12 months, it is still crucial to be a planner’s most-used insurance provider. Planners currently write 59% of premiums through their most-used insurance provider.

BT Life, OnePath and AIA Australia posted strong gains in terms of primary market share. The top five insurance providers by number of primary planner relationships are now:

1. OnePath
2. AMP
3. AIA Australia
4. BT Life
5. TAL

“Whilst planners are using a wider range of insurers, the market is also becoming more concentrated,” said Peker. “The top five insurance providers now account for 66% of primary planner relationships, up from 62% last year.”

Zurich and AIA Australia has the highest satisfaction amongst its users

“Satisfaction is crucial in the insurance space, as business is not very sticky and planners can easily stop writing new business with an insurance provider,” said Peker. “That’s why there is a very strong relationship between satisfaction and switching behaviour.”

Planners’ overall satisfaction with their most-used insurance provider remained steady at a high level. The top three insurance providers by overall planner satisfaction in 2014 are:

1. Zurich
2. AIA Australia
3. Asteron Life

Underwriting is a key area in which insurers can differentiate their offerings

Following the tightening of underwriting standards over the last year, we’re seeing the average number of days planners say it takes providers to process underwriting submissions increase from last year’s levels. This has resulted in planners’ satisfaction with underwriting falling slightly at an industry level over the last 12 months.

“The underwriting process is the strongest driver of overall satisfaction with insurers,” said Peker. “So, any falls in satisfaction with the underwriting process is noteworthy.”

“Underwriting is very important for both acquisition and retention, and will be a key battleground for insurance providers over the next year,” said Peker.

45% of planners said insurance providers should focus on improving underwriting speeds to help them with their advice on risk.

Users of XPLAN’s risk modules have the highest levels of overall satisfaction

89% of planners who advise on risk use risk software. XPLAN continues to dominate the risk software space with over half (53%) of planners using XPLAN’s risk modules as their most-used risk software. This is followed by Rubik/COIN (18%) and Midwinter (8%).

At an industry level, planners’ satisfaction with their most-used risk software remained steady at the eleven-year average.

Among risk software providers, XPLAN achieved the highest average overall satisfaction rating from its users and ranked highest across all nine of the other service elements measured.

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IRESS has continued to develop XPLAN into a world class financial planning application.

XPLAN has achieved the highest benchmark score for any financial planning application in the seven years of the Investment Trends Planning Software Report.

XPLAN was top rated, followed by Coin and AdviserNETgain.

The top rated Hybrid planning/platform integrated planning application was AdviserNETgain/Asgard.

FOFA development has been completed with a new development focus on engagement.

FOFA development has been completed with a range of enhancements to client service package management which give planners the ability to individually manage service package elements and control the level of reporting detail in client Fee Disclosure Statements.

The completion of FOFA development marks the end of several years of software development focussed on practice operations.

“Vendors have moved on from FOFA to refresh application interfaces, mobile functionality development and client engagement,” said Investment Trends Analyst Ian Webster. “Vendors are trying to improve planning efficiency by connecting planners and clients to practice workflow wherever they are.”

Vendors have moved to ensure their online applications are supported on tablets with IRESS and recently Coin releasing tablet apps with planner and client access.

IFAs, institutions and superannuation funds are using technology to deliver a range of scaled advice services.

The introduction of scaled advice has prompted the development of several new online planning applications and services as well as planning practices starting to use technology like video, social media and self-directed advice to develop new client relationships.

“Scaled advice may be an enduring legacy of the FOFA reforms,” said Ian Webster. “After several years focused on developing planning operations functionality for comprehensive planning, vendors are turning their attention to a broader range of advice delivery services.”

Provisio was surveyed as the best superannuation scaled advice application.

Projection based engagement has been a feature of superannuation fund websites for many years. In recent years financial calculators have been replaced by projection based self-directed advice recommendation services and call centre based scaled advice applications for superannuation advice provision.

“Provisio has been part of the development of superannuation advice technology for many years and has been joined by several other applications offering different approaches to scaled superannuation advice delivery,” said Ian Webster. “Rubik’s Proviso was surveyed as the best superannuation scaled application followed by Decimal and XPLAN Engage.”

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2013 Planner Technology Report released

Key findings of the Investment Trends 2013 Planner Technology Report:

• XPLAN continues to lead the planning software market with the largest number of adviser relationships
• Midwinter has the highest satisfaction amongst its users

IRESS leads planning software market in number of adviser relationships

IRESS’ XPLAN increased its lead in the software space following the migration of VisiPlan and MLC’s AdviserCentral users to it, and now holds 51% of primary planner relationships among software users in Australia, according to a new report released last week from leading wealth researcher Investment Trends.

In its tenth year, the May 2013 Planner Technology Report is an in-depth study of Australian financial planners and their technology needs. The study is based on a survey of 1,141 financial planners concluded in May 2013.

“The planning software market has completely morphed over the past decade,” said Investment Trends Senior Analyst Recep Peker. “Where VisiPlan used to dominate, and Microsoft Excel was used to plug the gaps, XPLAN is now the main planning tool for half of Australian planners.”

The industry has gone from the top four providers holding 56% of primary relationships in 2004, to a concentrated market where the top four now hold 87% of primary relationships.

Most used planning software by primary adviser relationships                        

Industry satisfaction levels hit a five year high

Planners’ satisfaction with their most-used software reached a five year high, although increasing only slightly from 2012.

“Versus last year, Australia’s planning software providers increased adviser satisfaction the most with constructing portfolios, capturing fact-find information, helping select investments and producing client review reports,” said Peker. “This reflects the extensive development work undertaken in these areas over the last 18 months.”

“Planners are also happier with their planning software across every element measured compared to a decade ago, though the area with the smallest growth in satisfaction, ease of use, is also the main area that planners still say they want software providers to improve.”

“Among the two large players, XPLAN had higher satisfaction than COIN, and the gap between them increased from last year,” said Peker. “Given the acquisition of COIN by Rubik, it will be interesting to see what happens to COIN’s satisfaction ratings following their new and upcoming developments including the refresh of the COIN user experience.”

Midwinter had the largest increase in users’ overall satisfaction from 2012, and the highest average overall satisfaction rating. Relative to the industry, it scored notably better for ease of use, producing simple plans and scenario modelling.

AdviserNETgain had the highest satisfaction ratings for value for money, producing comprehensive financial plans and producing client review reports.

Average time to produce a full SoA continues to decrease

“Even with planners’ clients’ needs becoming more complex, and a greater compliance burden placed on planners’ shoulders, software providers have continued to shave precious minutes from the time it takes to produce the average SoA,” said Peker. “Planners now estimate it to take over an hour less to produce a SoA than it did six years ago.”

“The greatest time savings are from editing and personalising the document, and calculations, modelling and projections.”

About Investment Trends

Investment Trends is the leading specialist market research organisation in the Australian retail wealth management industry, and also operates in the US, UK, Germany, France and Singapore. We provide new insights and decision support information to over 200 leading financial services businesses.  We combine analytical rigour and strategic thinking with the most advanced research and statistical techniques to help our clients gain competitive advantage.

Investment Trends’ clients include all of the top five Australian banks, the top ten investment platform providers, the top five online brokers, as well as industry regulators, leading margin lenders, dealer groups, financial planning software providers and risk product providers.

About the report

The results are drawn from the Investment Trends May 2013 Planner Technology Report, released to Investment Trends’ clients last week. This report was based on a survey of 1,141 financial planners in April and May 2013.

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Amongst these advice businesses are the vast majority of Australian institutional wealth businesses, along with many high profile boutiques, independent AFSLs and a large number of independent financial advisers.

Tizzy Vigilante, IRESS Executive General Manager of Wealth Management, says clients looked to IRESS as a scaled strategic partner for an effective, efficient and timely way to fulfill their new obligations.
“We are delighted to have risen to meet this challenge with many clients going live with XPLAN-­‐CommPay over the past weeks, ahead of the FoFA effective date of 1 July.”

The FDS solution has been one of the most sought after features of IRESS’ FoFA deliveries over the past 12 to 18 months, Ms Vigilante says. “Wealth businesses like the fact that the FDS can be tailored to suit their specific business requirements while maintaining effective oversight of their obligations.

“XPLAN-­‐CommPay is fully integrated within the XPLAN platform, enabling the adviser to combine client revenue data with service delivery and other customer relationship data, to facilitate the very efficient generation of fee disclosure statements,” she says. Ms Vigilante said that the IRESS team has been focused on delivering the best solution available while meeting delivery commitments across many concurrent client projects.

“We are continually investing in research and development, but the IRESS team pulled out all stops to ensure our clients were prepared for what is the most significant change to the regulatory environment advice businesses have seen,” she says. “We anticipate that the integrated XPLAN-­‐CommPay solution now available to all these users will mean we have made the FDS demands far more efficient and manageable.”

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Andrew Walsh, Managing Director of IRESS, said that XPLANtouch takes an important step in meeting adviser demands.

“Support for tablets is a key strategic initiative of IRESS,” he said. “Our clients want the convenience of mobile devices and we are keen to facilitate this.”

The XPLANtouch app allows advisers real-time access to client data and portfolios and allows them to present solutions to clients in visually interesting and meaningful ways.

“The app allows advisers to present a client’s data in a visual mind map,” Mr Walsh said.

“They can also complete the risk profiling questionnaire; produce results and discuss outcomes with clients – all while sitting with the client in the client meeting.”

While XPLANtouch is available on all tablets including the iPad, Android, and Windows 8 tablets such as the Microsoft Surface, under the hood it is a mobile web solution.

“XPLANtouch is an extension of the XPLAN advice platform, so all activity on the tablet is consistent with the advice processes defined and managed in XPLAN,” Mr Walsh said.

“This makes data access and use consistent and auditable.”

XPLANtouch and all its functions can be easily and seamlessly configured to match the corporate branding of financial advice businesses, large and small. 

“XPLANtouch can also be packaged as an adviser branded app in app stores to create a fully branded experience for advisers and their clients. It is within the reach of any dealer group using XPLAN to easily offer their own app,” Mr Walsh said.

IRESS has an ongoing investment and program of enhancements to XPLANtouch and will continue to work closely with clients on new ideas and opportunities.

XPLANtouch for advisers is available with release 2.7 of XPLAN.

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Rated the leading Australian financial planning application in 2012, IRESS has extended its functionality lead over Coin and AdviserNETgain with a vigorous development program though out 2012. \

Apart from FOFA, development has been directed at making complex functionality easier to use in a daily planning practice and supporting online scaled advice client engagement. XPLAN is the first planning application to support client engagement using social media with integration of popular social media platforms and services into their Adviser Desktop.

With the introduction of FOFA this July, planning software development has focussed on FOFA functionality with most applications also further developing risk product support responding to the continued importance of risk to many planners
New FOFA planning functionality took more than 50% of new development effort for most planning applications last year and this is likely to continue through 2013 as planners begin to use a FOFA compliant planning processes.

“Much of this year’s development activity was associated with the development of a client service package model layered on top of existing workflow functionality to generate the data for FOFA compliance.” said Investment Trends analyst Ian Webster

Developers also focussed on risk support and implementing an unusually long list of legislative changes to tax rates, allowances and benefits following the government’s 2012 mid-year budget. AdviserNETgain has continued to lead development efforts to improve planning efficiency.

Leading application developers’ approach to FOFA is based on a client service package model supporting client service level agreements
While some of the smaller developers and some platform aligned applications have taken a wait and see approach to implementing FOFA, the three leading applications – XPLAN, Coin and AdviserNETgain, have implemented similar approaches with client service level agreement based processes providing the data for fee disclosure statement production and “best Interests” test compliance.

“This approach extends an unprecedented level of application monitoring and disclosure to every part of planner’s daily planning activities.” says Ian Webster. “The introduction of client service package based planning is likely to be as significant a change to planners’ activities as the introduction of Approved Product List functionality several years ago.”

The Rubik acquisition of Coin will result in two new planning applications based on Coin Office from two experienced development teams
Following the sale of Coin Office to Rubik, two planning applications will be developed from the Coin Office 4 code base by Rubik and Macquarie Adviser Services to support new approaches to advice provision by institutions and the broadening market for advice provision. Rubik will develop a Coin based planning application for institutions and its international clients while MAS will develop Macquarie Visor for a range of IFA advice provider markets.

“Despite industry consolidation, planning and advice application development is now more vigorous than it has been since the first half of the previous decade.” says Ian Webster. “Scaled advice and direct to client applications will be the focus of planning application development in 2013.”

The post Key findings: 2012 Investment Trends Planning Software Benchmark Report appeared first on AdviserVoice.

When its legacy software (VisiPlan and ProPlanner) and white label relationships are taken into account, IRESS is the main planning software supplier for 45% of planners. COIN is the second-most widely used with 23% of planners using it as their main planning software.

The April 2012 Planner Technology Report is an in-depth study of Australian financial planners and their technology needs. The study is based on a survey of 1,412 financial planners concluded in April 2012.

AdviserNETgain takes the lead in overall satisfaction as industry level satisfaction hits a four year high
55% of planners now rate their main planning software as ‘good’ or ‘very good’, up from 52% in 2011 and the highest level seen in four years.

“As an industry, planning software providers increased satisfaction fastest with integration with platforms, the production of comprehensive financial plans, and ease of use and improved user interface design playing major roles,” said Investment Trends Senior Analyst Recep Peker.

“This is reflective of the development work undertaken in these areas over the last 12-18 months.”

Among primary users of software (independent of relative size):

• AdviserNETgain received the highest average overall satisfaction rating, achieving particularly strong ratings for user interface, integration with platforms and production of client review reports. AdviserNETgain also received the highest rating for ‘value for money’.
• COIN saw the fastest increase in overall satisfaction from 2011, with notable gains to satisfaction with the production of comprehensive financial plans, ease of use and integration with platforms.

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The 2011 version of the Investment Trends Planning Software Report is an in-depth analysis of fully featured planning applications most frequently used by Australian financial advisers. In Investment Trend’s December 2011 benchmarking tests, XPLAN achieved the highest overall functionality rating.

“IRESS has produced an impressive advice platform that is supporting their strategy to take Australian developed advice technology to international markets,” said Mark Johnston, Principal of Investment Trends.

“This is the fifth year in a row that XPLAN has ranked first for overall planning functionality,” added Johnston.

The report found that leading providers were the most active in adding new features to their products. Notably it commented that IRESS’ XPLAN ranked first with the much anticipated release of XPLAN 2 representing an important technology capability to support enhanced functionality in 2012.

IRESS continues to innovate across most aspects of functionality and released an important ‘Advice Container’ approach to codify Best Interest compliance in direct response to regulatory and compliance efficiency.

Andrew Walsh, IRESS’ Managing Director, commented, “IRESS continues to invest in our core XPLAN platform and bring new and innovative features to market, and it is pleasing to have this recognised again in this research by Investment Trends. Our core product and solution strength in meeting client requirements has not only seen growth in Australia but also made strategic inroads internationally, most recently in the United Kingdom where we believe our offer is significantly differentiated to local competition.”

“Our position as a wealth technology provider in numerous leading wealth markets is increasingly unique and strategic to our client base. Trends in consumerism and advice reform are resonating internationally, and the opportunity to address these common aspects with scale and broad experience presents numerous opportunities to IRESS and our clients,” added Walsh.

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XPLAN is the leading software solution in the financial services industry, providing a comprehensive wealth management and advice platform. Count CEO, Andrew Gale, says he expects XPLAN to bring substantial productivity gains and benefits to the advice and client review process and help deal with some of the upcoming regulatory changes in the financial services industry, such as the requirement for clients to ‘opt-in’ for regular reviews. Through XPLAN, Count estimates that productivity of the advice process could increase by up to 50%.

“There were several key reasons why Count selected XPLAN,” Mr Gale says. “In particular, the comprehensiveness of functionality in advice modules, the flexibility to be configured to uniquely reflect our value proposition to clients and the wider business efficiency and CRM benefits to our network of advisers.”

As part of the software review process, technology providers presented to a Count Adviser Panel, demonstrating how their software solution would work in practice.

“It was essential that a selection of our Count Members were included in the rigorous process to select our wealth management and advice platform,” Mr Gale says. “They are uniquely placed to comment on the technology and solution required to provide efficient and valuable advice to clients. Ultimately, it was clear that XPLAN could provide the integrated and adaptive solution we were looking for.”

Andrew Walsh, Managing Director of IRESS says IRESS is delighted to be selected as a strategic partner to Count.

“At a time where advice businesses are focussed on efficiency and delivery, we believe we deliver the market leading technology that a licensee of the calibre of Count requires in order to provide exceptional advice and service solutions to advisers and their clients,” he says. “It is becoming increasingly apparent that, in relation to technology, the focus of leading dealer groups like Count has shifted,” Mr Walsh said. “Critical to their strategy is the ability to provide their advisers technology which better exploits the proprietary knowledge and unique content that already exists within the group. A truly effective advice process is just as dependent upon what the dealer group brings to the table, as it is on the software which underpins the actual process itself.”

In January 2011, XPLAN will be implemented for an initial pilot group of Count Members, with a roll out across the group to start in March 2011.

Count released its current proprietary system  “WealthPlanner” in 2000. The system will be decommissioned in December 2011.

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