The ASIC report into death benefit claims revealing the devastating impact of poor industry practices on grieving Australians has again highlighted the pressing need for change. While some funds have taken up the cudgels, others are still playing hardball on improving their service offering.
A Retirement Income Covenant obligation notwithstanding, there is still a paucity of these complex products on offer. The Advice Through Superannuation draft legislation might offer a way forward.
Distribution challenges ahead for managers
Australian fund managers see opening new distribution channels and embracing digitalisation as their major challenges in a post-COVID environment, according to a survey by financial data communications group Calastone and UK publisher Funds Global Asia.
The Australian survey, for which there were 44 respondents, was part of a larger global survey with 291 respondents. It was called ‘Digital transformation and fund distribution: Technology and innovation in the asset management industry 2020’.
A total of 66 per cent of respondents saw distribution as a major risk ahead, 50 per cent thought embracing digitalisation a risk and 47 per cent regulation a risk, including ASIC’s ‘Design and Distribution Obligations’.
In answering a separate question on regulation, 59 per cent of the Australian respondents said that the advisory sector would contract further due to regulation.
Similar to the study by Casey Quirk on the use of technology by funds managers globally (see separate report this edition), of the Australian survey respondents, 42 per cent predicted a significant increase in spending on technology post-COVID, while 36 per cent thought there would be a marginal increase in spending (the Casey Quirk study quantified the expected increase in spending from a median of 10 per cent of operational expenditure to 20 per cent by 2023).
The producers of the Calastone/Funds Global survey said technology had been key to the funds management industry’s response to COVID, in terms of working from home, responding to customer service requests and trading instructions through digital channels.
“At short notice, the asset management world has adapted to remote working and rolled operational contingency arrangements into action that might have taken a decade or longer to deliver in normal times,” they said.
“This will accelerate the digital transformation of the asset management industry – and the innovation that it offers to support fund sales, investment advice and client support through digital channels.”
