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Deposit Platforms-Who is keeping the banks honest ?

Updated: Aug 5, 2022

We are all now having to cope with lower interest rates on cash funds. So how do you ensure that you achieve best practice in placing term deposits: Transparency – Are you getting the full rate? Any platform provider should show full transparency in their fee structures and revenue models. This includes any commissions received from the banks. If you are using a hybrid advisor/broker/platform provider, check for details of the fees they are earning and examine whether they are providing the most optimal outcomes for you. As the recent Banking Royal Commission highlighted, with some revenue models, there can be a lack of independence from the supplier. And in some cases no services rendered at all! This can result in suboptimal outcomes for organisations as certain banks and financial institutions miss out on bidding for funds due to these fee structures Conflicts of Interest – Is your TD platform provider providing you advice? Understand that there may be potential conflicts in arrangements with advisors or brokers. There are regulations that provide guidance on segregating your advisors from your product providers. If you’ll remember a number of councils engaged certain organisations who advised them to invest in collateralised debt obligations (CDO’s). At the same time, these advisors were manufacturing and distributing the products they were recommending. A clear conflict of interest. As a result, the risks associated with the product were never fully disclosed or understood, causing massive financial losses during the GFC. Appropriate AFSL Licence Is your provider licensed for all the services they are providing you? It is always prudent to check that your advisor, broker and corporate treasury software provider has the appropriate regulatory licence to provide ALL the services they are providing to you. All the above may have different AFSL licences depending on the products and services they provide.

Automation – How efficiently can you search for and transact on the best rates with multiple banks? A good service provider will enable you to automatically request rates and transact on the best ones from a large number of Australian Deposit-Taking Institutions. They will also ensure that there is instantaneous reporting on settlements, outstanding deposits and provide a full audit trail of all operations. Always allowing you to show the steps behind every single deal. Some service providers will even allow you to invite and transact with Banks that are not on their “panel”. Pricing Tension – Is your platform provider creating pricing tension in the market? A good provider will create tension in the market by ensuring all quoting banks provide their best rates. Every time. They can do this in a number of ways – the simplest of which is to create a transparent bidding process. Data Security – How secure is your information? You need to ensure that the service provider you select has full control over their systems to ensure data is securely protected. Onshore in Australia. Another secondary question to ask; can they provide guarantees that there are no unauthorised access to your data? How Is Likwidity Different? Likwidity is an independent AFSL licensed service provider that runs an  Unconflicted, Zero-Commission, Multi-Bank Deposit Platform in line with the latest recommendations of the Hayne Royal Commission. The team at Likwidity pride themselves on providing a feature-rich platform that allows you to: -Quote and transact with multiple banks in real time -Obtain zero commission quotes. Or revenue model relies on clients paying us monthly fees to access our platform -Invite “off platform” banks to quote on your funds. Your banks don’t need to be on some “panel” for you to invite them to quote -Obtain a complete audit trail of every deal -See your current and historical holdings at a glance -Re-invest or withdraw your funds on maturity Our services are built to ensure clients get the best rates on Cash Funds via our multi-bank quoting/transacting software platform. Our products are bank agnostic, thus creating pricing tension within the market. This, in turn, enables us to deliver competitive unconflicted rate outcomes for our clients. Likwidity is an online platform – no software to install. It can run parallel with your current systems, as well as interface with them.

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