Ashley Porter of superannuation advisory firm Mclowd told an audience of fund management platform providers earlier this year he had bad news for them – their revenue models had been disrupted and were heading for extinction.
"I am here on behalf of your clients … I am here to disrupt you … much of what I want to say, you do not want to hear," says Porter in his IO&C (Investments Operations and Custody) conference address, How zero marginal cost will shape business.
The so-called disruption is driven by consumers' realisation that many of the financial products and services they have traditionally paid thousands of dollars in fees for are now free, thanks to cloud computing.
Porter says it is just a matter of time before superannuation fund members question why their providers are passing on the high costs of expensive software licences when cut-price and even free IT platforms are available.
"We are not talking about buying a mousetrap that is 20 per cent cheaper. We are talking about a mousetrap that is free," Porter told The Australian Financial Review.
In future, fund managers will have to reduce their 100 basis point fees to 10 basis points if they want to survive in a world where consumers are waking up to the fact that the cost of managing assets has become negligible, he says.
Andrew Godfrey, Mercer financial services business leader, Pacific, agrees that costs linked to managing superannuation funds need to be cut.
"(We) are looking at how do we make super cheaper? We need to reduce the amount that it costs providers such as Mercer … while at the same time designing new user experiences using digital technology," Godfrey says.
Read more : http://www.afr.com/news/special-reports/cloud-computing-reshaping-the-industry-20151115-gkzc86
"I am here on behalf of your clients … I am here to disrupt you … much of what I want to say, you do not want to hear," says Porter in his IO&C (Investments Operations and Custody) conference address, How zero marginal cost will shape business.
The so-called disruption is driven by consumers' realisation that many of the financial products and services they have traditionally paid thousands of dollars in fees for are now free, thanks to cloud computing.
Porter says it is just a matter of time before superannuation fund members question why their providers are passing on the high costs of expensive software licences when cut-price and even free IT platforms are available.
"We are not talking about buying a mousetrap that is 20 per cent cheaper. We are talking about a mousetrap that is free," Porter told The Australian Financial Review.
In future, fund managers will have to reduce their 100 basis point fees to 10 basis points if they want to survive in a world where consumers are waking up to the fact that the cost of managing assets has become negligible, he says.
Andrew Godfrey, Mercer financial services business leader, Pacific, agrees that costs linked to managing superannuation funds need to be cut.
"(We) are looking at how do we make super cheaper? We need to reduce the amount that it costs providers such as Mercer … while at the same time designing new user experiences using digital technology," Godfrey says.
Read more : http://www.afr.com/news/special-reports/cloud-computing-reshaping-the-industry-20151115-gkzc86
No comments:
Post a Comment