Licensees' attention turns to data in the quest for advice practice efficiency

Published 17 September 2021

Grahame Evans, Easton Wealth

GPS Wealth has a strong track record in the Licensee of the Year stakes, as a multiple winner of both its respective licensee category (previously independently owned, now Top Tier) and the overall LotY award.

But the licensee is not resting on its laurels. It has a substantial program of work mapped out for at least the coming 12 months, to help advisers come to terms with the ongoing reshaping of the industry through regulatory change and to focus on operating more efficient and profitable advice businesses.

The Executive Chair of Easton Wealth, Grahame Evans, says the trick to remaining engaged with advisers and ensuring feel supported through some difficult times has been to find a balance between meeting ever-changing compliance requirements while remaining focused on clients and their needs.

Evans says the challenge for licensees is not to let things swing too far in either direction – to either place regulatory and compliance issues ahead of serving clients, or to skimp on regulatory and compliance requirements for the sake of not upsetting the adviser’s relationships with clients.

“It’s being able to explain to them the ‘why’, not just the ‘what’, and in trying to overcome some of the emotion that’s generated by this extensive rebore that we’re going through in the industry, being able to explain to them where the benefit is in this, and where’s the actual problem,” Evans says.

“Going through with our advisers and explaining why this has
actually happened becomes really, really important.”

Grahame Evans, Easton Wealth

“A good example is breach reporting. If you look at the average days taken by organisations, particularly the larger organisations as outline in the Royal Commission– and I won’t mention their names – to provide a breach report, it’s something in the order of 120 or 130 days. The time in the legislation was 10 days.

“Why have we ended up where we are? Because of that situation where the institutions were not adhering to the 10 days, we have a situation where we’ve got to basically report most breaches of legislation which have a civil penalty.

“Some may think that’s overkill, but it’s certainly going to stop this issue of not reporting, or ‘investigating’, in inverted commas, what are real breaches. So going through with our advisers and explaining why this has actually happened becomes really, really important.”

Evans says GPS remains focused on ensuring its advice practices better understand the client segment they’re targeting.

“We’ve spent a lot more time with advisers around understanding our segmentation. More so than we have around any particular advice issue. A lot of technical stuff that comes through is OK, we get that. But actually refining the way you should deal with clients, how you should see them and how to assist them, is something a lot of advisers could use some more assistance on.”

The next 12 months will continue to challenge licensees, even after they’ve helped advisers navigate the plethora of changes due to kick off during October alone.

“Once we get past October, we probably have 12 months of making sure we’ve bedded down annual consent, making sure people understand the difference between fixed-term agreements and ongoing service arrangements, because some people interchange them regularly; making sure breach reporting issues are not affecting advice practices as much; as well as the DDO obligations. So there’s a 12-month runway of those issues.

“One of the major tasks we’re focused on is working on the data analysis
to make sure we can identify problems early and work with advisers to fix them.”

Grahame Evans, Easton Wealth

“Part of the licensee’s objective here is how do we analyse the data to make sure we can identify when there’s a problem and identify it quickly? One of the major tasks we’re focused on is working on the data analysis to make sure we can identify problems early and work with advisers to fix them. This legislation is not uncomplicated. It’s quite complicated and, as such, it doesn’t take much to step outside the boundaries of an enhanced FDS, for example.”

Evans says connections between GPS and HUB24, established through acquisition of Paragem from HUB24 by GPS parent company Easton Wealth, and HUB24’s acquisition of a stake in Easton, will also start to play out during the year ahead.

These connections will be particularly apparent in how GPS collects and analyses data to support advisers through “being able to extract unstructured data and analyse it using a combination of artificial intelligence and machine-based learning, to make sure we know what we’ve got”, Evans says.

“Quite often, for example, Xplan will [say] put data in a certain spot,” he says.

“Sometimes [the adviser] won’t put it in that spot. It’s not a case of saying it’s not there, therefore it doesn’t exist. Within HUBconnect, we’re working to be able to identify documents much better and to analyse them as well, to make sure they’ve got the component parts we need.”

Evans says he’ll be working closely with the new Head of GPS Tara Ross on these initiatives.

“It’s going to make licensees more efficient with the data collection we’re doing and being able to put that into dashboards; and in addition to that it’s going to give advice businesses a much more efficient way of doing things, such as enhanced FDS and SoAs as well,” he says.

“So there’s a lot of work going on in our world around efficiencies in the licensee and efficiencies in the advice practices.”

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