In a recent episode of the ifa Show podcast, Asendium chief executive Scott Miller said licensee compliance policies, and their lack of interest in improving efficiency, were the main reason many advisers were currently spending the majority of their time preparing compliant paperwork rather than engaging with clients.
“A lot of the work planners do is for the licensee, not the client – the burden that’s been put on planners is astronomical,” Mr Miller said.
“Planners are crying out for help and don’t want to do things manually anymore, but currently it’s held up usually from a licensee standpoint. A licensee will say ‘unless this technology integrates with this technology, even if they work fine separately, we won’t approve that other technology that will help a planner’.
“The licensee is looking at it from a compliance point of view, the planner is looking at it from the ‘how can I help a client’ point of view. They’re both important points of view, but there needs to be a bridge.”
Mr Miller said one of the most common reasons a licensee would refuse to allow advisers to adopt an external piece of technology could be for revenue reasons, as many licensees had bolt-on paraplanning services that were compulsory for aligned advisers to use.
“Internally employed paraplanners charge for their services to planners as a part of that licensee, so as a result paraplanning businesses within licensees can also be revenue generating for licensees,” he said.
“When I was [an adviser] at AMP, the most expensive SOA I paid for was $1,500 and I had to pass that cost onto the client. I had to use those paraplanners because it was a licensee requirement.
“So if licensees have a revenue generating arm of the business, there may be less adopting of technology that removes that revenue generating arm.”
Similarly to the initial fear that robo-advice would replace human advisers, Mr Miller said there was also a reticence among licensee compliance departments to adopt technologies that could make some of their roles redundant.
“Licensees trust the compliance team to manually do the process instead of technology, but what a compliance process is, is ‘if this then that, or else this, then that, if they do this make sure there’s that’ – it’s simple coding logic,” he said.
“Compliance teams will say technology cannot do what we do, so they will say no to this technology to make sure the licensee doesn’t embrace it – we’ve seen that a couple of times. What technology does is it doesn’t replace their role, it enhances the efficiency in their role.”
