Lack of integration between technology systems is resulting in an increased burden for wealth managers, with approximately 95 per cent saying it can take up to six hours to create a client’s annual investment report.
A survey of 121 UK wealth managers conducted by Sprint Enterprise Technology in June highlighted that following the Retail Distribution Review, 66 per cent cited a lack of integration between the systems they use to gather data needed to create client reports as their biggest concern.
Almost two thirds also said that the time it takes them to produce an RDR-compliant client investment report is a key concern.
Most financial advisers required an average of 160 minutes – approximately 2.5 hours – to produce a single client report. Overall, 95 per cent of those surveyed estimated that it could take up to six hours to produce a single client report.
Christopher Willmott, chief executive of Sprint Enterprise Technology, said: “In trying to adapt to the change in regulations post RDR, financial advisers have been forced to implement all sorts of new tools, and now they have very real concerns about how the various systems they use talk to each other.”
Almary Green Investments managing director Carl Lamb agreed with the report’s assertions. He said: “Post-RDR reports are now taking nearly as three times as long as pre-RDR reports, and to achieve what aim?”
Mr Lamb added that the complexity of the various share classes was very time consuming.
He said: “We have to consider the differences in costs between dirty, clean and super clean shares and the whole cost basis that the clients are incurring.”
Patrick Connolly, a certified financial planner at Chase de Vere, told FTAdviser that he had not experienced any such problems with the time taken to produce client reports, although the firm started the transition to be RDR-compliant back in March 2011.
He said that unless fact finding time was being included, the average time it would take to compile a report would be around two hours and anything significantly over that was “just an ineffective use of time”.
Mr Connolly said: “If advisers are having problems that would suggest they haven’t fully integrated RDR and the relevant systems into their day to day business.”
Daren O’Brien, director at Aurora Financial Solutions, agreed that there was not much difference in time in pre-RDR and post-RDR report-writing.
He said: “Our issues and additional time is really in regards to the providers and obtaining the information and documentation in the first place to write the report.
“It does seem a little excessive at 2.5 hours to simply write it, but if they are including other elements (writing, printing, copying for file, copying research, including any forms for signatures, proof-reading, compliance sign-off before going out) then that could be about right post RDR.
“We do more checks of the information we send out now, not just for compliance but the clients are paying a fee for these reports and we don’t want any mistakes and so it was a little less time taken pre-RDR.”
Sprint Enterprise Technology’s survey found a third of respondents reported “radical changes” in their business model over the past two years, with only 5 per cent saying they are working much the same way as before the RDR came into effect in 2013.
“Wealth managers who use technology that can truly aggregate data and help to create consistent, accurate and timely reports in an efficient way will be in the strongest position to continue to grow their business and face the inevitable challenges – and opportunities – post RDR,” added Mr Willmott.
