Implemented Portfolios

I am a really big fan of all of our clients. One, Implemented Portfolios has some great videos. See them in action here..

https://www.youtube.com/channel/UCK5hLVWoEkfWLzmFyBRdkoQ

http://player.vimeo.com/external/111703116.hd.mp4?s=4933298f6f5ba821fa23f7b0777b81cc

http://player.vimeo.com/external/111702624.hd.mp4?s=9fdacecec8224ced37a2b18a28b9cb6f

Financial System Enquiry in Australia – Another Catalyst for Financial Simplicity

With the Murray report out just before Christmas, it has now given me some time to digest it and some of the recommendations.

Clearly there is notable mention of the retirement income system, superannuation, and some of the key components that support such and just general investing, which I suspect will have some fairly considerable ramifications across the investments and wealth management industry. Whilst I understand that there is much more work to be done in determining which recommendations will be adopted, and how they will be implemented, I thought I’d take my interpretation of some of the points with a view to outline what the emerging industry structure could look like, and highlight how Financial Simplicity is well positioned to be the cornerstone of wealth management business models moving forward.

If we look at some of the recommendations and objectives relating to investments and retirement that come from the report, we could break them down into a number of levels, each with key themes:

 

SOCIETAL = resilient 

REGULATORY = tool sets 

INDUSTRY STRUCTURE = data access, efficiency

INVESTMENTS = Product target markets and impact investing

WEALTH PRACTITIONER / PROPOSITION = Efficiency, alignment with consumer outcomes, suitability and appropriateness

CONSUMER = engagement, technology neutrality,  scaled advice, digital identity,

 

And for each item, let me put a certain perspective on them:

RESILIENCE – a take on resilience is meaning that not only is this about resilience from shocks in the markets, but also resilience in terms of the combined public and private investments supporting a population for many generations to come. Whilst there are many angles on this, a key desired outcome for this has to be about reducing overall costs of the process of investing and holding investments, whether for retirement or other investing. You could look at this challenge in another way: for every dollar that is lost in an investor’s account to fees, it is potentially another dollar that the government may have to provide in the future to support the investor. Another aspect of resilience is about simplification of the industry structure to have less layers between investors and their monies (in order to reduce risk of failures), and remove repetition of costs.

REGULATORY TOOL SETS  - a take on this is to extend current regulation and monitoring about the sale of individual investments to investors, to that of overall ‘whole of client portfolio’ regulation. We are increasingly seeing this being introduced into the regulatory agenda around the world, and the FSI report is perhaps suggesting that either the regulator themselves may be equipped with the tool sets (and technologies) to monitor investment advice on a holistic basis, or the need for organizations, in a similar way that public companies are required to have independent audits of accounts, to have independent audits of the way clients are provided holistic investment solutions.

DATA ACCESS- Whether it be about performing better analysis to improve decision making, or just keeping people informed about investments with improved transparency, the processes and technologies to perform such activities are very much dependent on data access. My take on this is that the industry will both be easier to deal with, will foster innovation, and service consumers and their advisers with increased and cheaper data access.  Whilst the trend is going this way regardless as business seek to achieve operational efficiencies, I’d like to see that there even be an obligation on different participants in the investments industry to make data available to consumers or their authorized service providers in order to accelerate innovation and openness.

 EFFICIENCY – going hand in hand with data access and availability is the natural pressures on the investments industry to become more efficient. With a related impact on overall societal resilience, and technology neutrality, I’d suggest that investment proposition models or offering types that are operated with greater levels of efficiency should be encouraged, and where appropriate (i.e. in consumers clear interests) even given preferential treatment or relief from the overheads and process that has been accumulated over the years in more conflicted investment offerings. A good example of this is the opportunity to introduce a lighter compliance framework associated with the provision of an investment portfolio to a consumer that follows an agreed and published (often from a third party) mandate with the investments held by the consumer themselves, and perhaps even monitored by the regulator. Whilst this requires the operator of the proposition to have a level of ‘discretion’ to adjust the portfolios when required, it is a far cry from the risks associated with providing an investment adviser with discretion as to what may be bought and sold from the entire investment universe.

 PRODUCT TARGET MARKET – I really like the idea that where an organization is manufacturing an investment product, that it is done so with a target market and / or even specific purpose in mind, rather than just seeking to outperform a benchmark. I guess from this we may see different benchmarks emerging that are more consumer orientated, and we will see I suspect increasing obligations on product or proposition manufacturers to ensure their products are being ‘used’ appropriately. I do however question if such overhead is introduced, whether this is just a stepping stone to the collapsing of the product distribution industry model to a point where all players are having to develop consumer relationships (with the associated margin of doing so) in order to cover such costs. I suspect that this will be the case and we are already seeing many asset managers go ‘back to retail’.

 Clearly a product or proposition that is designed to adapt to specific consumer needs has a larger market, and so the growth of client customized investment solutions I suspect is inevitable.

 The debate between active and passive investing is not new, however clearly when looking at investment products consumers will not only want to be aware of asset class exposure, but also are they exposed to the risks and costs in their product of seeking to achieve outperformance and whether this is appropriate for them.

 IMPACT INVESTING – I just like the idea of this, and think that more consumers will be attracted to invest in initiatives that can bring societal and social benefits rather than just financial ones. I wouldn’t be surprised also over time if the charter of shareholding, or that of having investments in something include the ability for shareholders / unit holders to represent their views on subjects to help management make decisions that are in the interests of their investing stakeholders.

FOCUS ON CONSUMER OUTCOMES – Whilst a lot of shift in mentality and behavior comes around from the removal of commission on products (as dealt with by FOFA) – which eventually means if your customer doesn’t really value what you are doing, you don’t get paid !, The implied point here is that if a business is part of an investments supply chain, if what you are doing doesn’t create consumer value then you will have to question the sustainability of your business model. I notion that there are in general 2 types of functions in the supply chain, ones which are procedural and ones that require an element of consultation with (or consideration of) the end consumer.  If one follows that the best person to best deal with the consumer is the one who has the relationship with them, then we will naturally see a gravitation of the consumer facing decision making processes towards either the consumer themselves, or the advisers and service providers that service them. This is likely where the higher risk, higher value activities will occur in the future, and require as the report suggests increased educational and quality standards to deal with such. But what does it say for everything else in the supply chain. This shift to consumer empowerment means downward margin pressure and commoditization on the industry supply chains as the consumer outcomes are often (within the bounds of risk management and regulation) about lower costs, less fees and more retained value in their investments.

 SUITABILITY – this is the other side of the coin from the discussion about product providers needing to define target markets for their products. My thought process here is that suitability will extend beyond not only risk profiling of individuals, but more about ‘pots’ of monies with specific purposes, outcomes and attitude to both asset class risk, but also what degree of speculation is sought within such asset classes, liquidity etc.

 CONSUMER ENGAGEMENT – Whilst the report mainly focuses on superannuation fund member engagement, there are clear tones that increased engagement is good for confidence in the overall system and consumer experiences, perhaps even leading to consumers taking more responsibility for their financial affairs. My thoughts are that this engagement has to be:

-        accessible

-        simple to understand

-        supports consumers understanding the decisions that they have to make, and helping them make them

-        be coupled with educational materials

 If some of the new websites around the world are something to go by, consumers are increasingly making decisions about their providers on the consumer engagement experiences, and combining this with further choice and data access, means that the consumer engagement experiences could have material impact on customer recruitment and adoption moving forward.

 SCALED ADVICE – Coupled with consumer engagement above will be growth and acceptance of on-line algorithmic decision making about investments. Whether regulation gets ever to the point of prescription of any formulas will be doubtful, however I suspect many organisations will travel the trajectory of the scaled advice path, adapting to various glitches and cases along the way that will start to define the acceptable boundaries for such. Whilst we are seeing a number of on-line sites that essentially blend some form of scaled advice with their investment offerings to make it commercially viable, it will be interesting to see what emerges in terms of isolated scaled advice on it’s own as a process without being tied to any investment, what will be it’s cost, and what protections it comes with. I think we will see considerable challenge to the various models and philosophies that emerge, and suspect over time such scaled advice processes will need to adapt to the knowledge base of a consumer user.

 

TECHNOLOGY NEUTRALITY – The mentions in the report about technology neutrality I think are great, and perhaps will push the investments industry to move in line with payments and other financial services. This is a complex one when it comes down to disclosure, but in terms of post account set up authorizations, however like the payment industry, I suspect we will see considerable innovation in terms of consumer approvals via mobile phones or other electronic devices.

 DIGITAL IDENTITY – Should this eventuate, I think it would be excellent in terms of consumer outcomes and efficiencies across the wealth and investment industry. This is not an insignificant challenge though and will take some effort.

 

SUMMARY

 Whilst the above points is not exhaustive or complete, and I have applied a broad degree of interpretation, the general themes that I see progressing can be summarized as:

1)    the industry will continue to move from professional sellers to professional buyers on behalf of their clients, placing cultural and change on industry participants that have grown from a sales orientated history

2)    increased obligations for consumers will bring much of the subjective decision making closer to the consumer in order to be practical and cost effectively compliant

3)    Consumer interaction and on line experiences will significantly impact customer recruitment and satisfaction

4)    Such consumer centric subjective decision making will be increasingly under the scrutiny (and monitoring) of the regulators, perhaps with regulatory technologies with detect and prevent controls

5)    The industry structure supporting such consumer interactions will be increasingly automated and open architecture

6)     Government, consumer and societal resilience pressures will continue to drive down costs and margins on this infrastructure

FINANCIAL SIMPLICITY READINESS FOR A POST FSI WORLD

 I very much welcome the FSI report as further encouraging and opening mindsets of change in the overall investments and wealth industry. I see such advancements being a) a good framework for incremental changes; and b) essential to ensure long term resilience of the country and the role of the financial system in supporting the countries people and activities.

 At Financial Simplicity, we have been working hard for over 10 years now in anticipation of a lot of these trends, and helping investment industry participants develop wealth and retirement propositions, with associated operating models, to support such driven largely to date by their own instincts and values, which now may be form part of regulation and law.

 Our whole concept of mass tailored portfolio management combines many of the themes furthered in the Murray report, that of consumer interests, efficiency and regulatory controls in a way that ultimately provides better outcomes for all stakeholders. With increased data access and industry connectivity, we see a bright future for wealth and investment advisers that can use our techniques and technologies to provide better consumer outcomes, better business outcomes and with some advancement, most likely a much improved regulatory outcome in terms of risk management and costs to implement.

 

 

 

 

 

And the Future is about......

So, here is my call for the next decade.....The future of wealth management discussion (even policy) and  marketing will shift from people's wealth to their financial 'well being'.

To some extent we are already seeing this. Some examples include in the latest AFSA retirement blueprint report (great report !) it talks not about wealth in retirement but affordability of income streams , and increasingly also there is much reference in governments that are being concerned about what is the burden on governments (and hence future tax payers) of supporting those who have retired from work. There are many more cases where we are seeing these macro considerations coming to the front.

So, what does this really mean and what is really different in financial 'well being' from 'wealth management' ? Well strangely enough what it means is that one moves to the end investor's 'being' and not just their wealth being an increasing part of the puzzle, but as you may ask, what does this 'being' mean in practical terms ?

Well as a friend and adviser of mine (an Actuary married to a professional in social welfare) in the UK commented at the end of a talk about the future of the industry, it means less about numbers and statistics, and more about counselling and human welfare. Yes, it means actually moving from beyond those who manage other peoples monies being a 'record' in a system (ie a unit holder of a fund), and more about understanding the people, their motivations, their way of communicating, their inner beliefs, their drivers, where money fits into their lives and minds, their ..... 'being'.

So then, how does one test  whether a business can really practice what they may preach in this regard ? Can we just put a new term up on a website and brochure and suddenly say we are in the business of financial 'well being'. I suspect the answer for many will be just that, but  in the same way that we all know the difference between those people who say they are 'good friends', and those who actually really are, I think that earning the right to allowing people to help them with their 'being' will have to be demonstrated before really being believed.

And this largely comes down to behaviours and reputation. Behaviours that over time show that providers have earnt the right for consumers to open up about the 'being' and reputation that they have not performed acts that would conflict with a position of improving people's 'well being'. Consistency I think is key here to be believed. But this is not easily achieved, and especially hard to achieve if a firm has been in a position where many would argue that the practices of the past have perhaps swayed the balance of stakeholder towards shareholders rather than consumers and their 'being'.

I expect to see a raft of  new brands, new terminologies, perhaps even new regulations in this very difficult formula about a person's 'well being'. I suspect over time it will also require greater accountabilities of consumers (and disclosures) to also both help providers determine and communicate what their 'well being' is, and take responsibility for such as well.

Future Proofing Your Business From Regulatory Change

One of the fundamental pillars of financial markets working is consumer confidence in the integrity of systems and participants. Without this confidence, there is a lack of participants, it has for capital to be raised or traded and confidence in markets and the systems can be dented - we may remember  what happened to the credit market in 2008 due to the discovery of the in-transparent nature of credit default swaps, leading to a ‘run of the banks’ in some parts of the world.

In July, I introduced on the blog the concept of the ‘Social Regulator’ and how the industry is reforming – not only in response to regulation, which is largely reactionary, but also through leading indicator of how business models should develop is relation to what is reasonably acceptable to both consumers and public opinion generally (who are increasingly being championed by the media in the face of high profile advice scandals).

The latest validation of this thinking in Australia is the defeat of widely anticipated watering down of Future of Financial Advice (FoFA) laws in the Senate, which means Financial advisers must now fully comply with Labor's original version of FOFA. With the ammunition of recent scandals still very much in the papers and social consciousness, Labor, the Greens and four crossbenchers, argued the Coalition's proposed changes would leave investors vulnerable to a future financial collapse.

It means that on balance, the politicians believe that the fundamental pillar of confidence, which is so necessary in properly functioning financial markets, is broken. In the case of CBA and Macquarie, despite the vast resources of these institutions, if they cannot be trusted to act in the public’s best interest in the pursuit of profits, how can anybody argue something isn’t broken here?

Some anecdotes being prescribed for the industry point to more training, regulation and red tape, and some, such as a public register of advisers, are an attempt by the industry to appear more professional and transparent.  Our views are that whilst a step forward, these seem more like a band-aid solution when what is really needed is a fundamental rethink. 

For firms trying to decide on a winning business model going forward, the environment may appear stifling, with FOFA still around and FSI and who knows whatever else around the corner. This creates a dilemma in many financial advice organisations in terms of how can I achieve the right balance of compliance and business competitiveness? The trend at the moment is to hire more compliance staff (at the expense of advisers and other revenue generating headcount) and commit to ‘higher training and professionalism standards’. With margins in financial services already compressing fast, the last thing advice businesses need are more non-revenue generating costs.

Financial Simplicity believe compliance cost blowouts are first and foremost a cultural problem – not necessarily at the organisational level but rather at the industry level – and to improve compliance requires taking a step back and considering compliance in sometimes completely different ways.

If compliance frameworks exist to regulate and monitor the quality of advice provided to clients, but are largely administered manually through compliance teams, documentation and training programmes, this becomes a non-scalable and expensive solution, that will most likely have some holes in it's approach. The compliance effort is also a product of the organisational culture and leadership, and pressure to produce results can also see compliance pushed to the bottom draw.

Rather, Financial Simplicity views compliance as a fundamental embedded part of a firms operating model (ie EVERYTHING IS COMPLIANT) rather than a framework that is imposed on top with costly checking resources.. And because everyone else is so pre-occupied by keeping their compliance frameworks up to date, those with compliance embedded into their operating model, operate at a competitive advantage, with resources directed towards client and revenue generating activities.

Financial Simplicity has, for more than a decade enabled embedded portfolio and investments compliance to be automated and systemised in our clients’ businesses, to the extent that they don’t even have dedicated compliance resources or think about compliance in terms of explicit costs or periodic audits - they just know it is all OK. It is embedded directly into their revenue generating advice activities and often taken for granted as compliance is an ‘outcome’ that is systematically applied through automated and technologically-driven processing.

If you are currently concerned about how to ‘future proof’ your business and revenue against future regulation, it may be time to talk to Financial Simplicity about how we can radically reduce your compliance costs while positioning your business for growth.  

The arrival of the 'social' regulator

In Australia we are starting to see considerable debate in the public domain about the possible shortcomings of the recent regulatory frameworks, and also differing ideas of what 'should' be done to improve the situation, with many firms, organisations and associations putting in their 'ten cents' worth.

Whilst some of the comments and suggestions appear to defensive about past practices, and some of it being about a desire to take the high moral ground, with an inference that other views may be lesser, my observation is that most of it has merit, and we are inching towards the development of a new set of standards and regulation.

Whilst some of this new era standards and regulation may be in the form of training and qualifications, some in the form of removing conflicted remuneration, my guess is that the whole industry is finding it's way towards what is becoming acceptable to both consumers (otherwise consumers will go elsewhere) and / or the mass public opinion (otherwise it gets attacked in the media). I call this the 'social regulator'.

As we are seeing in the UK now, the 'social regulator' is getting increased coverage and attention, fuelled by media campaigns by the Telegraph and other papers. Not suggesting that this is the only influence, but it does appear to have to have some influence on policy, and feedback associated with setting such. It looks like there is nowhere to hide for regulators and politicians now and there is equal political and reputational risk of doing nothing as well as making changes.

In Australia recent responses and suggestions include the suggestion of a consumer standard way of measuring or assessing financial advisers, which has merit. I do however think that this theme needs to be extended not just for advisers or money managers, etc, as I think it is the segregation of these roles that confuses much of society. We need consumer opinion of the overall experience and proposition by industry participants, and if the social regulator theme continues, I suspect it will be happening quite soon.

At Financial Simplicity we have been working on this theme for some time to help firms assess their overall proposition to consumers, provide a basis for comparing against others, and identify remedial and pro-active ways to improve such. Ultimately I think that either the 'social regulator' and / or consumers themselves are going to force this change, and my tip to industry participants is to be very clear on what is your value add, or be at the risk that your customers and social commentators start publically scrutinise what you are doing.  A far better result that we help firms with is to help firms articulate this proposition and constantly communicate with their clients to be one step ahead of the public debate.

Why an ASX trading platform may be best for delivering your firm’s SMSF proposition

There has been much recent debate regarding the future of the platform market as competing services and technologies are starting to emerge, that provide legitimate alternatives for practices that are looking to gain a competitive edge.

Lets be clear from the start - with net positive fund flows in excess of $27bill during 2013 (Plan For Life) , wrap operators are not really insecure about their market position. FOFA has struggled to address the largest conflict in the advice market, with vertical integration of banking / financial service conglomerates being allowed to persist.

Given the emerging landscape, in order to remain competitive and relevant, non-aligned wealth advisory groups and boutique IFAs have little choice but to consider alternatives rather than support platforms controlled by these institutionalised groups, and at the same time need to consider how to create a new, FOFA compliant revenue stream. All FOFA seemed to do for independents is increase regulatory scrutiny around both product and platform recommendations, in addition to financial revenue derived from recommending either being phased out.

A major trend so far has been to set up or ‘white label’ competing platforms, or deliver similar looking products through SMA platforms. The enhancement to the value proposition being around transparency, portfolio customisation and individual tax management – all relevant to the type of investor these groups should be targeting (HNW and SMSF).

The question is whether replacing a wrap platform with an SMA platform will really provide independent groups the edge and differentiation they need to compete and create a new sustainable revenue model. What they are effectively doing is replacing one product-platform solution with another, and probably for a similar level of fees.

If you consider the needs and desires of HNW and SMSF investors, they are after value for money advice service compared with a ‘do it myself’ alternative – nothing more, nothing less. The vast majority of these people do not have a financial adviser, are invested in cash (term deposits), and direct shares which they have purchased through an online broker.

If a firm wants to attract this type of investor, they need to think like them, and consider using an ASX trading platform in favour of another margin-clipping product-driven administration platform to support the provision a value-for-money service-led advisory proposition. It’s not that self-directed investors don’t want to, or don’t see the value in seeking advice, it’s just that there is not a great deal of confidence in the current format where it is integrated with platforms and products, hence the growth of SMSFs in the first place.

The first and foremost advantage ASX trading platforms have is they do not have the stigma of other wrap platforms and fund products in terms of kickbacks, trailing commissions, rebates, soft-dollar arrangements, volume-based incentives and under the table remuneration arrangements at the expense of clients’ hard-earned savings. What a firm is doing by executing through an ASX trading platform is saying to your prospective clients is that you too, care about the cost and transparency. Instead of units holdings in trust and nominee structures, all of their holdings are CHESS registered (secure and portable) in their name which has considerable perceived benefits to many.

The key consideration here is the opportunity to offer a truly service-led proposition that focuses on tailoring a portfolio of shares, ETFs, and listed securities (the client is already somewhat familiar with), rather than funds and products through another platform that has similar constraints such as investment, liquidity, control extra fees and a proprietary tied execution platform.  

What about all the other great things wrap and SMA platforms do, such as consolidation of assets, and tax and reporting? Firstly it should be considered that reporting provided by wraps (due to the way they process data) are generally insufficient for tax reporting and audit purposes for SMSF investors. Secondly there is ongoing innovation in the portfolio administration service provider market that effectively renders much of the reporting capabilities of wrap platforms obsolete. We consider the impact and viability of some of the emerging wrap alternatives below.

• For advisers who still prefer to access fund manager skill, the launch of ASX’s mFund service which now allows the purchase of (a limited, though increasing range) of managed funds at wholesale fee rates, through a broker, just like any other listed security. Up until now, discount brokers only offered sale of (retail fee rate) funds by effectively having a PDS download and entry fee rebate service.
• Portfolio administration and other innovative technology-based service providers are allowing advisers to replicate or improve on many of the functions wraps currently provide, with more tailoring to business and client requirements. This includes replacing tax and reporting functions with SMSF friendly auditable double-entry accounting systems, as well as enhanced portfolio management features that wrap operators are on the back foot trying to replicate
• More flexible managed account solutions are emerging, that enable advice businesses to run large numbers of individually customised and tax managed portfolios with scale and systemisation, under a number of business and advice model scenarios. MDA operators have dominated this space, however there are now options for firms that run an advisory model with scale, that can address the concerns of not wanting to give up control of their client assets to a third party.

These emerging trends mean that, for the cost of brokerage and (sourcing or producing research) research, more savvy wealth management firms realise that it is now possible to replicate the features and benefits of wrap and SMA platforms and fund managers, and take the investment management function (and margin) in-house. The benefit to their clients is they receive a more tailored, transparent investment service at a lower cost of delivery that is in line with their current experiences and understandings.

The challenge for wealth firms that wish to bypass platforms is to source all of the services relevant to their firm and integrate them in a way that achieves desired outcomes. Depending on the business and advice model, services can be offered on either a discretionary or advisory basis to clients, and research/ model portfolios can be either be produced internally or sourced from preferred third parties.

The investment universe is now perhaps wider than a wrap platform of relevant investments, and only defined by the range of trading platforms used (it could be multiple, including access of direct overseas shares and securities on other exchanges). Firms need to consider what this means for their business processes and what combination of technologies and solutions will best power their desired operating model and business outcomes.

It is this flexibility to adapt to different business needs that is becoming attractive to firms looking for a platform alternatives they increasingly service different client segments, run multiple brands or offer different types of portfolio services. The challenge of putting it together can be complex, however the rewards, and potential to create a sustainable revenue stream while delivering real client satisfaction within a FOFA-proof business model are , on a number of measures, likely to be more attractive than doing nothing.

To find out more, contact us at Financial Simplicity.

July 2014.

Copyright Financial Simplicity 2014.

Does not acting in consumers best interest means consumers are themselves are an adviser ?

There is a lot of discussion in Australia about winding back the obligation of financial planners / advisers to act in the best interests of their clients, with a lot of discussion being about the costs to deliver such. But I notion that the costs of delivering this may be offset against the cost to the investor of not enforcing this.

Some thoughts... If anyone is offering services that are about a consumers’ financial future, and they are not working in the best interests of their clients, then this highlights to a 'researching' consumer that they may be encouraged to evaluate a range of possible service providers to see which of their service offers is most aligned to the consumers best interests (if the consumer actually knows what their best interests are...)

The need to evaluate each service provider then takes up both the consumers time ('selection costs') as well as the service provider’s time, and the marketing costs to attract them, ultimately adding to the cost of attracting the clients, which must be recovered some how in the cost of servicing them.

This also then places a burden on the consumer to make a decision as to which adviser / service provider to use which forces them to be to some extent their own ‘adviser adviser’ – which many would suggest most may struggle with as it is usually a rare occurance in one's life to perform such a selection process...

So far, this is looking confusing and expensive for both the consumer and the providers pitching for the work....

I guess as being highlighted in the press recently about 'buyer beware for financial planners', like most industries I'd suggest that big brands are likely to be the beneficiaries, using brand equity to help overcome consumer confusion or lack of knowledge.

However if the alternative is where an adviser must act in the best interest of the consumer investor,  this increases trust, perhaps even advocacy, and theoretically this ultimately reduces overall costs through eliminating (or reducing) the 'selection costs' , and should improve both consumer outcomes, and long term savings outcomes.....perhaps in the best interest of society...