Midwinter says software due diligence needed


By Julie May

Email Article Print Article

Copious amounts of client information were being hosted on cloud servers, which raised the question of whether financial planners were asking enough of their software providers to ensure data security was watertight, a senior executive said on Friday.

Julian Plummer, who is managing director of financial planning software provider Midwinter, told financialobserver sector software had come a long way since the 1990s, when it was desktop-based, whereas now it was managed through data centres via the internet.

While there were providers on- and offshore, he said information was generally stored locally, adding that all Midwinter’s information was with Amazon’s Sydney data centres.

“With so much client data being stored via the cloud it is really important when a financial planner does due diligence on a software provider that they ask the right questions, those being around information security as well as functionality,” Plummer said.

“Advisers need to know where data is stored, how it is backed up, what the company’s background is and how seriously they take security.

“They need to ask about their implemented information security management system, how often they do audits and management reviews, and undergo penetration tests by third parties.”

Finding out whether coders and developers were based in Australia and had access to client information was also important as “good intentions” simply were not enough, he said.

Knowing whether financial planning software providers required all staff to have background checks was also worth looking into, he added.

Smaller financial planning firms took about three to six weeks to determine a software partner, whereas larger licensees could take six to nine months, he said.

He said that time was used to assess factors such as advice processes, client relationship management systems, workflow and point of sales capabilities, in addition to training requirements.

He said groups spent time assessing technology as well as functionality, as they had to do rigorous security checks to ensure all systems met requirements.

“It’s really important that planners look at attributes outside of just functionality, as when you select a financial planning software provider you are essentially choosing a business partner,” he said.

He emphasised he was a big believer that the future of financial planning software was cloud-based, but not all cloud partners were created equal and it was important planners made sure they were working with reputable providers.

« Back to Articles