GBST Composer™ Market Ready for ‘New World’ Under FoFA Reforms
GBST Composer™ Market Ready for ‘New World’ Under FoFA Reforms
Independent Review by Praxis Partners – “FoFA Reform Readiness Review” - confirms GBST Composer™ market ready to adapt users’ product, administration and operational procedures to meet FoFA requirements
SYDNEY 6 SEPTEMBER 2012
GBST Holdings Limited (GBST) (ASX: GBT), a global provider of securities transaction and wealth administration software for the financial services industry, announces its GBST Composer™ suite is the first market ready response to the Australian Federal Government’s Future of Financial Advice (FoFA) legislation which came into voluntary compliance use on 1 July 2012.
The legislation calls on financial services organisations to provide fee transparency for advisors and retail investors and the timely delivery of accurate product and service information to those client groups. To enable a smooth transition to the new regime, the reforms will be voluntary until 1 July 2013.
GBST commissioned Praxis Partners to independently review its changes to the GBST Composer™ administration system. The analysis saw particulars of the legislation cross referenced with responses from GBST Composer user interviews to assess how well the functionality addresses their new business needs.
The “FoFA Reform Readiness Review” publicly available today, confirms GBST Composer™ is market ready to adapt users’ product, administration and operational procedures to meet FoFA stipulations.
Stuart Milne, Director, Praxis Partners, said in releasing the Review: “We are comfortable that current and future users of GBST Composer™ are able to readily and efficiently transition to the ‘new world’ under FoFA.
“In discussions across the spectrum of GBST Composer™ users, a key theme that emerged in relation to adapting to the new regulatory regime was the product’s flexibility and ease of configurability.”
GBST understands that major regulatory change, such as FoFA, represents both a challenge and an opportunity in the highly competitive Australian financial services marketplace.
Nick Frolich, Executive Manager of Wealth Management, GBST said: “To be FoFA compliant will be a challenge for every player within the industry. But we’re enabling our clients to rapidly switch onto the requirements that will provide them with a market differentiator window. "
GBST Composer™ is a market-leading platform that will reduce the impact of the transition while delivering superior service, and keeping costs down and operational efficiency up. It is built with regulatory reform in mind, offering innovative solutions to support evolving business needs.
“We’re able to be first to market with a product suite that supports our customers’ FoFA compliance because we have a dedicated team of specialist business analysts who focus on tracking regulatory changes. This enables us to be highly proactive in our product development and in effect roll out product enhancements such as these to clients well in advance of formal requirement,” Nick Frolich said.
The key business issues reviewed in the Praxis Partner Review and addressed by the application of GBST Composer™ are:
Fee transaction granularity to enable advisers to meet the fee disclosure requirements of FoFA
Recording and housing of fee opt-in charging data
Reporting requirements to maintain registers of opt-in (and out) clients
Functionality to ensure that clients who have opted-out do not have advice fees deducted from their account and paid to and adviser/dealer group
Functionality that distinguishes between risk insurance contracts within and outside of superannuation and the ability to not charge advice fees on those risk insurance products within superannuation, as defined by FoFA
The ability to distinguish between asset based fees charged on invested amounts and borrowed amounts, and not charge fees on those borrowed or geared amounts
Stuart Milne added: “While there are still a number of outstanding clarifications required from a legislative perspective, GBST has considered and planned for various outcomes in this regard and will support full compliance with final legislation.”
About GBST - www.gbst.com
GBST (ASX: GBT), provides global technology services to the financial services industry, addressing our clients’ constant needs for innovation, competitiveness and responsive IT that truly enables business. Listed on the Australian Securities Exchange, GBST is headquartered in Brisbane and has offices throughout Australia, in London and New York, and has operations in Hong Kong, Paris and Singapore.
About GBST Composer
GBST Composer offers a single, fully integrated system to administer managed funds, structured and retirement products. It encompasses functionality that provides administration and registry platform services as well as CRM, imaging, workflow, STP, online capabilities and comprehensive reporting for servicing investors and advisers.
It is capable of administering a wide variety of products available in the marketplace: wraps; life products; superannuation – corporate and personal; risk products; pensions; loans; unit trusts – retail and wholesale; and cash management including term deposits.
About Future of Financial Advice Reforms
The Future of Financial Advice (FoFA) Reforms apply only to financial advice provided to retail clients. The Reforms commenced on 1 July 2012 and, for the financial services industry to transition to the new regime more smoothly, they will be voluntary until 1 July 2013.
The key components of the FoFA Reforms are: best interests duty; opt-in and fee disclosure; ban on conflicted remuneration; ban on soft-dollar benefits; and scaled advice.
The FoFA legislation, as passed by the House of Representatives and Senate, contains a number of pertinent areas of legislative impact:
1. Ban on conflicted remuneration for AFSL holders and their Authorised Representatives where advice is given to retail clients including a ban on commissions on risk insurance products within superannuation;
2. Fee disclosure regime and granularity of information provided to consumers of financial advice services;
3. Implementing a time limit on the period in which financial advice fees may be charged to consumers of financial advice services; and
4. Abolition of the charging of asset based fees on borrowed/geared investment amounts.
About Praxis Partners Pty Ltd
Praxis Partners is a financial services consulting business which has been in operation since 2000. Founded by its principals Kieren Dell and Stuart Milne, Praxis Partners assists financial services organisations across the market with research, design and development of financial products; market analysis; and identification of trends and future opportunities.
Further information from:
Robert DeDominicis, CEO of GBST Wealth Management
T: +44 (20) 7613 8840 E: firstname.lastname@example.org
Nick Frolich, Executive Manager, GBST Wealth Management
T: +61 418 494 404 E: email@example.com
Cathryn van der Walt, 12 Worlds
T: + 61 402 327 633 E: firstname.lastname@example.org