Technology providers would do well to pay attention to how their products are used, says Mark Polson in this month’s Technology Spotlight column.
Client reporting has become a constant, and many have expressed frustration with the function on platforms.
Functionality is a concern for a model portfolio service discretionary fund manager (DFM) as running bulk models is not a zero-effort, so doing so efficiently is essential.
Following his examination of the functionality in platforms for advisors, Mark Polson found that he was struggling not with DFM functionality, but with client reporting.
Recalling an advisory firm that he recently worked with in choosing a platform, Mr Polson said, “This is an advisory practice which has an average client balance of £300,000 or so, and prides itself on looking swish and wants to portray that to any advisers who adopt its portfolios.”
The platform with the best client experience, not the best functionality for the advisor, was chosen by the adviser from Mr Polson’s recommendations. Price, investment and wrapper range were neutral, and all leaders had a good service and cultural fit.
“What was heartening about that to me was that your man picked the firm which would make life better for his client rather than for him. But this was enlightened self-interest,” Mr Polson said.
From his research, Mr Polson discovered that it would cost the adviser one full-time equivalent (FTE) in one year for poorer functionality on the actual wealth and portfolio management side, but that well put together client reports would only cost two to three FTE per year on relatively modest assumptions. If the adviser hit scale that would increase while the functionality one would stay constant.
How the details of a platform are presented is what makes the big difference, according to Mr Polson, but simplicity runs the risk of going too far when things are missing.
Many advisers, however, do not see the potential of over-simplifying the presentation of a platform as a looming problem.
“In fact, if there was one uniting theme in the chaps we spoke to, it was a desire to simplify reports still further, and make them have more visually impact. The odd pie chart does not an engaged client make,” said Mr Polson.
The advisory industry has a tendency to over-manufacture, to build to compete against others rather than to the needs of clients or sometimes even the needs of advisers.
Mr Polson raises the issue that tucked inside this issue is the ongoing question of who platforms are for – clients pay more after but, in the main, advisers benefit.
Novia’s updated Report Zone is used as an example of a platform going in the right direction – the reports are clear and well laid-out, though they do lack an aesthetic aspect.
“I don’t know where it all goes but unless we work harder at matching client needs to the stuff we design and build, we’ll never get far,” said Mr Polson.
