A lot of the promotion of platforms seemed to centre on the benefits to the adviser but I needed to be convinced of the benefits to the client.
It was developments in 1st’s system, when the asset allocation feed was added in November 2005, that convinced me. It meant that all client portfolios could be analysed simply and quickly and their asset allocation compared with the model suggested by the integrated Tillinghast risk-profiling tool. Asset rebalancing and fund switching only becomes cost-effective for the client, and administratively practical for the adviser, if all funds are held on a platform.
I looked at and tried a number of platforms but it was the partnership between Cofunds and Adviser Office that sold me completely. The integrated transaction feed automatically enters all transactions into Adviser Office, allowing immediate access to a complete record which can be incorporated into client reports. The integration of the Cofunds consolidation tool combined with the transaction feed makes re-registration easy and efficient. The fact that the client is charged no extra fees for using the platform is an important consideration.
Several other features increase efficiency and save time, including application forms, switch forms and other forms integrated and pre-populated from Adviser Office. Morningstar fund research is also provided free to Cofunds users.
Cofunds has been quick to consider my requirements in its development. I am a member of the Ethical Investment Association and filtering ethical funds was important. Within a few months of presenting my case, Cofunds added an ethical fund filter which is available to all users.
The Cofunds consolidated cash account was launched in January and has been well received by clients. The ability to get a fixed monthly income from a range of investments is a tremendous service that we can monitor with the new Cofunds cash account feed.
Comments from clients have all been positive. They like the consolidated statement which is much clearer than the statement from any individual fund manager. They can log on to our website to view their portfolio at any time but they also like the facility of being able to log on to Cofunds.
There are a few things I do not like and find restrictive. Direct shareholdings cannot be re-registered and the limited range of funds means that some funds have to be converted into cash prior to re-registration. From clients’ perspective, conversion to cash may coincide with the need for asset rebalancing and our recent addition of Financial Analytics, which makes fund analysis quick and simple, often demonstrates the need to switch. However, a more open architecture on re-registering would assist considerably.
The much discussed re-registration between platforms is an issue that will hopefully be solved in the not too distant future.
Alan Moran is principal at Interface Financial Planning