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how the financial services industry is changing

This is a quarterly commentary by Dr Don Stammer, who is the non-executive chairman of Præmium Limited and writes in his personal capacity.

Around the world, the financial crisis has eased and even the global recession seems to have passed its low point.  It's a good time to consider the ways in which investment flows and the structure of the Australian financial services industry will be changed by the experience of the global financial crisis and the other factors shaping it.

The regulation of financial institutions and investment markets changes after every financial crisis.  This time around, the regulatory reforms in Australia are likely to be less extreme than in the United States and Britain, which were the epicentres of the global financial crisis. Nonetheless, changes will occur here across a broad front. 

The Reserve Bank will be required, I expect, to accept responsibility for dampening booms in asset markets before these booms gain too much momentum.  Capital requirements on banks and banks' processes for assessing and managing risks will be tightened.  "Responsible lending" laws will be imposed on banks, financial planners, mortgage providers, retailers and others who lend to, or arrange finance for, the public.  Financial institutions creating "securitised" products are likely to have to maintain some continuing responsibilities for them. 

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p-desktop enhancements!

A number of enhancements to p-Desktop have been made recently.  Some of the significant changes are:

On Portfolio Review Tools, available only to AFSL holders or Authorised Representatives of AFSL holders:

New features include:

For more information about these changes, please contact the Client Service Team at mail@praemium.com.au .

 

changes to pricing methodology for warrants

A new pricing methodology for warrants has been implemented on V-Wrap since 1 July 2009.  Going forward, warrants will no longer be updated with the last available closing price at the end of each day.  Instead, the Valuation Prices for each day will be uploaded on the morning of the next business day.

Closing prices loaded for warrants from 1 July onwards have now been replaced with the Valuation Prices for each day in order to have a consistent pricing methodology for the new financial year. Warrant prices prior to 1 July will not be updated.

The Valuation Price is the highest last BID price available for the day. If there is no BID price available, then the Valuation Price from the previous calculation becomes the new Valuation Price.

While we have sent a message to all Level 8 users, please ensure that all users in your service are notified of this change where necessary.

For more information, please contact the Client Service team via email at mail@praemium.com.au .

 

powerwrap announces integrated sma technology for the advisory practice

Powerwrap is pleased to announce that Præmium's award winning SMA technology will soon be available as a fully integrated component of the Powerwrap Investment Account.

Powerwrap's Chief Commercial Officer, Peter Rowley, said: "The integration of Præmium's SMA technology in our wrap platform will provide a long awaited solution to advisers that want to use SMA functionality as an integral part of the client's investment (wrap) account".

A key part of our strategy is to deliver SMA functionality to advisers in a way that enables them to construct (SMA) portfolios using the broadest possible range of direct assets as well as managed investments.

Commenting on the limited range of securities available through most SMA products, Peter explained: "The key difference in our approach (to SMAs) is that we enable the adviser to implement their own preferred models, across a range of direct equities, fixed interest and managed funds, providing full sector and product structure coverage.  And from the feedback that we've received, it's a solution that makes a lot of sense to financial planners".

"We're not trying to jam a limited range of equities models into the planner's recommended list.  What we're offering is a solution that enables financial planners to obtain significant gains in practice management efficiency by delivering technology in a way that gives the adviser ultimate flexibility and control over portfolio construction."

As the Responsible Entity of the Powerwrap Investment Account, Powerwrap handles all trading and rebalancing activity within a Managed Investment Scheme (MIS) structure. "With the assistance of our Investment Committee, we allow advisers to implement their own investment models and manage asset allocation within the SMA product.  From there, advisers simply manage client accounts following the models. It's no longer necessary for advisers to manage and trade each client account individually."

Commenting on how this adds value to the advice relationship, Peter explained that:  "Where advisers approach portfolio implementation through models, the gains in consistency and quality of risk return outcomes across the advisory practice's client base can be significant.  Quite simply, it's a key benefit to investors that can also reduce advice risk."

Offering access to direct equities and fixed interest as well as a range of more than 650 managed funds, financial planners can fine tune their own SMA models to meet the needs of their clients irrespective of the risk profile or value of the client account.

For more information, please contact Peter Rowley, Chief Commercial Officer on 03 8681 4610 or David Harris, Head of Distribution, on 03 8681 4604.

 

hnw underpins its growth on technology

client profile

Robert Cumming, founding Director of HNW Planning and a director of SYNCRM, explains how setting up a coherent and consolidated system infrastructure has resulted in capturing growth even in this difficult market.

Tell us a little about your firm and the services you offer

HNW Planning and SYNCRM are based in Gosford, NSW. HNW Planning provides personal insurances advice, superannuation and investment advice.  Unusually for a non-accountant financial planning group, HNW Planning administers a significant number of SMSFs as well.  We also are shareholders in a mortgage and brokering operation.

SYNCRM FPS is a customisation of Microsoft Dynamics CRM. The Microsoft user interface will be quite familiar to most people and its therefore easy and intuitive to use. A Customer Relationship Management (CRM) focus also reflects what we really do in a financial planning business.

What are some of the challenges your financial planning business encountered that prompted you to invest in technology?

Does the above picture look familiar?  Like many other financial planning businesses this is how HNW Planning looked until we concentrated our efforts on cleaning up our databases and systems.  It's so confusing there is little hope of being sure of data integrity let along building systemisation within the business. 

Our most valuable resource in the form of the best personnel in our office used to get so bogged down in the day to day of finding, organising and relating data just to keep up a mediocre service to our clients. 

Finding a coherent and consolidated system to support the complex operation that we had was one of the biggest issues we encountered. 

Growth was being strangled by the weight of disorganised systems that ate away time from revenue generating activities.

What made HNW Planning decide to use V-Wrap?

I think the platforms do an excellent job especially for the smaller client, but I did a back-of-envelope calculation some time ago and noted that between them my larger clients were paying the platforms almost $200,000 per annum that they needn't.

I transferred some of my clients' wholesale managed funds off the wraps and now monitor the investment on V-Wrap for a fraction of the cost.  This gives me many strategic advantages to cope with SMAs, ETFs, LICs and direct shares as well as the wholesale funds.

More recently Powerwrap has given me the chance to streamline the management of the wholesale managed funds as well.

Using V-Wrap reinforces that I work for my clients, not the product manufacturer and not for dealer group volume incentives, for which I used to but no longer qualify.

Any useful tips for other new or potential users of V-Wrap?

If you're like us and choose to act as the mail centre for correspondences then there may be some problems with extra document management creating an extra workload in the office, but at the end of the day, those problems are not so insurmountable to ignore the $200,000-odd savings a year, especially if you share some of those savings with your clients then there should be more than enough to pay for any further support required.

The second point I would make is that a new or potential user of V-Wrap should set aside some time to review other "tools of the trade" that are used in the practice.  If your financial planning software frustrates you and cannot cope with some of your clients' complex situations, and if it's not focussed on what you actually do within your business, then investigate alternative solutions.  Look for a "bottom up" system approach that can support your entire practice and promote growth through a better customer relationship management.

A third is that you still need to cope with smaller clients not using the V-Wrap. SYNCRM FPS accepts data feeds from V-Wrap as well as most other platforms so that information it can be brought together in the one place and similar internal systems used within your business.

I sincerely believe software is one of the strongest possible change agents.  The choice of software will have an increasingly greater bearing on the profitability of our industry.

If you would like more information on HNW Planning or SYNCRM FPS, please email Robert Cumming at robert@syncrm.com.au .

 

webinar - back to basics

Join Sean Crisp, Præmium's Client Service Manager, as he provides group online training (webinar) in respect to setting up a portfolio, including setting up bank, portfolio and user links.

Date:  Thursday, 6 August 2009              

Time:  11 - 11.45 am

There is no charge to attend our webinar service, however, you must register.  To register for this session, click here.

 

spaa state technical conferences

As a proud sponsor of SPAA, we hope to see you at their upcoming State Technical Conferences.  Six expert speakers will discuss:

Dates for the following cities:

For more information & to register, please click here.

 

smsf strategy day

SMSF Strategy Day (with Grant Abbott) represents an opportunity for financial advisers and accountants specialising in the sector to learn about the latest issues and trends affecting the fastest growing segment of the superannuation industry - with SMSFs now representing approximately $350 billion of the market.

As a proud sponsor of this event, we look forward to seeing you there.

For more information on this event, click here.

 

other upcoming events

A number of seminars and workshops will take place in the next couple of months that may be of interest to you. 

Heffron's advanced SMSF training day

Heffron's one-day training session is designed to meet the needs of professionals who require a more advanced knowledge of self managed superannuation funds.  This year's dates are as follows:

Praemium clients will be eligible to a discounted registration fee.  To register your place in Brisbane/Sydney/Newcastle, please click here.  To register your place in Launceston/Melbourne/Perth, please click here.  For more information, please email heffron@heffron.com.au .

 

recent announcements & in the press

In case you missed the following recent announcements from Præmium or articles in the press, you can read it by clicking the link below:

You can view other ASX Announcements  or articles in relation to Praemium at any time by visiting our ASX Announcements or In the Press section of the website.

 

 

Disclaimer: The information in this publication is of a general nature. While Præmium Limited and its related bodies (‘Præmium') endeavour to provide accurate and timely information Præmium do not guarantee that the information in this publication is accurate at the date it is received or that it will continue to be accurate in the future. Views expressed by contributors and/or services described which are provided by third parties are not necessarily endorsed by Præmium. No responsibility is accepted by Præmium for the accuracy of that information, and Præmium in no way takes any responsibility whatsoever for material contained on external websites referred to in this publication.

in this issue...

tip of the month

Updating Tax Component information

Now that 30 June 2009 has passed, both Listed and Managed Funds will begin the process of distributing information pertaining to the tax components of distributions made during the 2008/09 financial year.

As this information becomes available, the components for each security will be added in V-Wrap and portfolios will be updated accordingly.

Services will also be advised of those securities updated via the System Messages screen.  So keep a look out!

 
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