BGL partner Apricot Actuaries have drawn on their experience in the digital advice space to apply ‘Fintech’ thinking to actuarial certificates. Their CEO and actuary Jim Hennington explains what makes a ‘Fintech’ actuarial certificate.
Recent improvements in the data provided by platforms such as Simple Fund 360 mean actuaries can innovate further and improve the way they process SMSF data. ‘Fintech’ type thinking lets us enhance what can be done digitally.
Let’s consider an example of a 64 year-old named Bill who has recently retired.
Bill has an account-based pension worth $650,000 and makes the minimum annual payment each year. A.S.A.P.’s system identifies that Bills pension payments don’t seem to have met the minimum because he turned age 65 during the year. This issue could require the pension to be commuted and cause a change in the tax exempt status of the fund.
The A.S.A.P. system approaches this situation in 2 ways depending on how material the issue is:
- For small discrepancies, the accountant instantly receives a message on-screen, informing them that Bill’s pension payment amount looks below the expected level. This gives the accountant the opportunity to check the data before submitting the final certificate order. It may help clients like Bill get the correct actuarial certificate first time.
- If A.S.A.P.’s system identifies that Bill’s pension payments were materially lower than the minimum, the accountant is alerted more strongly and is prompted to enter comments about the issue to explain further. In effect the system is having a conversation with the accountant in real time. It ensures the actuary has a full picture of the SMSF immediately and therefore doesn’t need to subsequently chase additional information from the accountant.
This is just one example of over 40 similar quality control behaviours – developed by our team who have overseen over 50,000 certificates during their combined careers.
Often with actuarial certificates, assumptions are required. For example, the way market values of investments move during the year and impact member balances. The Fintech approach teaches the system to identify when assumptions are required and presents them to the accountant to review in real time. This often alerts the accountant to issues that they can easily resolve before the certificate order is finalised.
It all results in a process that is more likely to be right first time and delivered instantly. It increases the chance of getting the final signed off ECPI percentage without putting the clients file down and wait or, worse still, having to re-do work if the ECPI figure subsequently changes.
Being a Fintech firm also lets us reduce costs, including our automated payment processes. If the actuarial certificate can be fully dealt with by the system, our price is just $89 + gst. Over three quarters of the certificates we receive get this price.
90% of Apricot’s users state that they are likely or extremely likely to recommend A.S.A.P. to others. We are always on the lookout for opportunities to add value, so keep an eye out for new additions to the platform in the near future.