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Automation to ease FDS headaches

Advice practices can save as much as $60,000 a year by automating the service benchmark data that goes into fee disclosure statements (FDSs), according to an industry consultant.

Each FDS must include the amount of each fee paid by the client in the last year; the services the client was entitled to in the last year; and the services the client actually received in the last year.

According to Enzumo chairman Andrew Rawlinson, planners are pretty well prepared when it comes to the fee component of FDSs – but they don’t have the back-office processes in place when it comes to the service benchmarks delivered to clients.

“FDSs are not just about fees. In fact that’s a small part of it. You’ve got to look at what you’re doing to automate the delivery of tracking and recording of all of the [service benchmarks],” said Rawlinson.

Service benchmarks differ according to client segmentation i.e. ‘platinum’ or ‘silver’ clients), and include services such as newsletters, phone calls, portfolio reviews and face-to-face meetings, he said.

Practices that use XPLAN can take advantage of the software to set up alerts when service benchmarks are due and whether or not they have been delivered, said Rawlinson.

When it comes time to produce a FDS, the information can be pulled from XPLAN rather than having back-office staff waste time and resources digging through client files, he added.

The opportunity cost of having to create service benchmark data manually could be between $50,000 and $60,000 per year for a 300-client practice, Rawlinson said.

“We’re expecting that there’s going to be a huge wave of demand [for our services] once 1 July hits and people start labouriously doing [an FDS],” he said.