Speaking to ifa, the head of the software provider believes practices that rely on internal technology are more prone to hacking than those that use out-of-house equipment.
“There’s a lot of stuff in the press about advisers acting inappropriately on behalf of their clients… It sounds to me that part of the problem there was that the technology was susceptible to being taken advantage of,” he said.
“And it is proprietary – it’s all in-house – so you think, ‘Who has admin access? Who can make changes here?'”
Mr Morris, who works with dealer groups, financial planning firms and accounting firms, said he often comes up against proprietary technology built more than 10 years ago.
He has found that lately, more companies are opting for an out-of-house software provider as a way to protect themselves.
“A product is a product,” he said. “It can’t be co-opted or changed by anybody. And because we’re not part of the organisation, we’re just a vendor, we maintain an objective reporting role, whereas if it’s in-house, who’s to say who has access to manipulate things?”
Other companies, which prefer to use their own technology, can instead add transparency to their systems, he said.
“Because if the client has ongoing access to their investment products, that forces the adviser to raise their game. You’re sort of subject to a 24/7 audit by the world,” Mr Morris said.
“Your product had better be damn good and better be transparent at how you’re arriving at things like portfolio performance calculations.”
Wondering,
I would think that all providers should have agreements in place which obligate them to return ALL data if either party terminates. Having said that, Id also be surprised if the software your using doesnt permit you to export data (all or selected elements) on a needs basis. Unfortunately, and this may well be your situation, the ability to access features like export are determined by the administrator of your solution rather than the vendor. A quick search through your solutions Help documentation (something like export client data) or a call to their Help Desk should confirm this for you.
Another challenge that youve highlighted (data conversions) isnt as readily addressed, and there are many factors which need to be taken into consideration. Typically, the two solutions are unlikely to have matching features. The result? You either have a lot of data with no home available for same in the solution you are moving to, or lots of gaps if the reverse is the case. The exercise is further complicated by the fact that each provider will be storing the data in different formats (think of it like languages) and therefore a big translation process needs to be undertaken. Who you involve will influence the success of the project. I recently saw a video where a panel of advisers were told that data migration was easy if you didnt want all your data be very wary of anybody using the term easy!
In short, software decisions need serious consideration. Your requirements should be well defined and include less cited criteria like strength of the business and investment history you want a strong sense of ongoing and significant investment into the solution, otherwise youll be looking down the migration path sooner than planned.
Happy to discuss further if youd like (call me directly on 03 90185912).
Proprietary software is in house software? Huh? I thought all software was proprietary these days, even out of house.
One of the problems with the cloud is that you can get locked into an echo system and never be able to get yourself out of it. Held to ransom by the cloud provider.
Yes you are told you can easily change from one provider to another, but try performing a complete data dump from the software (which you cannot do) in a manner that allows you to import all of that data into your new system (which you cannot do). Then you have to keep paying the old supplier so you can access the old data or just accept losing it.
Talk about being totally done over with your data control and ability to be nimble.