HUB24: Leveraging Google Cloud to manage financial advice compliance obligations and reduce the cost of advice
About HUB24
HUB24 Limited is a company listed on the Australian Securities Exchange. The company consists of the award-winning HUB24 platform, HUBconnect business, and Xplore platform. HUB24 offers advisers and their clients a comprehensive range of investment options, including market-leading managed portfolio solutions and enhanced transaction and reporting functionality. As one of the fastest growing platforms in the market, the platform is recognized for providing choice and innovative product solutions that create value for advisers and their clients. HUBconnect focuses on leveraging data and technology to provide solutions to common challenges for licensees and advisers and enable the delivery of professional advice to more Australians.
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Contact usTogether with Google Cloud, HUB24 is working with licensees and leveraging cloud technology and data to build industry-wide solutions and insights to make data more accessible and cost-effective.
Google Cloud results
- Reduces the cost of financial advice which on average costs up to $3,500 initially plus $3,500 ongoing by using AI and machine learning
- Lowers the compliance burden on financial advice licensees and promotes higher standards throughout the sector
- Delivers data and technology solutions to power transformational business solutions to solve key challenges for financial advisers and their clients
- Reduces the HUB24 development team’s reliance on the infrastructure engineering team, saving 10 to 40 hours of effort for every new application deployed when compared to an on-premises infrastructure
Powering wealth management innovation and solving key advice delivery challenges
Expert investment and wealth management advice can be the difference between achieving life goals and experiencing uncertainty and financial pressure. Founded in 2007, HUB24 has grown to become an important player in the recently restructured wealth management and investment advice sector in Australia. The Australian Securities Exchange-listed business operates one of the fastest-growing platforms in the market with more than A$58 billion in funds under administration. Advisers and clients can select from a range of investment offerings including managed funds, equities, term deposits, and managed portfolios.
With growth fuelled by the exit of banks and financial institutions from wealth management in Australia, HUB24 continues to develop technology and data services that support investors, licensees, advice collectives, and financial advisers. Advisers are often registered through licensees who assist them with the costs and obligations of running an advice practice. This licensee structure presents a challenge to create operational scale and efficiency, while generating the revenue to invest in technology that allows them to achieve their objectives effectively.
HUB24’s investigations identified limited access to quality data as a key issue for licensees. “Licensees may not have the view of advisers’ practices that allows them to perform their core functions,” explains Greg Hansen, Senior Business Strategy Manager at HUB24. “Using manual processes to conduct activities such as audits, revenue processing, and monitoring fee disclosure statements becomes very expensive and time consuming. What we wanted to do was give licensees visibility over practices so they can fulfill their roles more efficiently and cheaply.”
Through HUBconnect, the business focuses on leveraging data and technology to provide solutions to common challenges for licensees and advisers and enable the delivery of professional advice to more Australians.
Traditional infrastructure unsustainable
Since its inception, HUB24 had run its platform and ancillary technology businesses from infrastructure in data centers on Australia’s east coast. However, the organization wanted to adopt a more efficient approach.
“We would have to maintain our own infrastructure at up to three times maximum load, meaning we would have a lot of redundant capacity around the place, plus we would need to run multiple instances to enable disaster recovery,” says Craig Apps, Head of Innovation for HUB24. From 2016, the business began to pay closer attention to how public cloud and infrastructure as a service could support growth and innovation, including the release of new products and services as well as being more cost-effective.
“With Google Cloud, we have a product trained to recognize 21 document types, take key metadata such as the name of the adviser and the name of the customer, and save the document into our data warehouses for use to build reports and applications.”
—Craig Apps, Head of Innovation, HUB24Strongest capabilities in AI and machine learning
HUB24 has adopted a multicloud architecture incorporating a private cloud and products from three large public cloud services. However, as the business focused on data, its innovation team met with each cloud provider to evaluate their capabilities and roadmaps for data, particularly AI and machine learning. The team identified Google Cloud as providing the strongest capabilities in these areas and elected to make the platform the primary cloud provider to its platform, products, and services.
The business’s key reasons for selecting Google Cloud as its primary provider were the “data-first” philosophy behind the platform that aligned closely with HUB24’s data strategy and the focus on machine learning and AI, which HUB24 had identified as core technology to its business. The organization established an infrastructure footprint incorporating multiple virtual machine instances to build its machine learning capabilities and created a small division to leverage its capabilities in the space.
HUB24 is using a range of Google Cloud machine learning, AI, and API products, including Document AI and Vision AI to develop solutions powered by models trained on its extensive datasets, including a document classifier. “Our clients generate and receive documents for their customers, including address update forms and planning advice,” explains Craig. “These documents typically reside within a customer relationship management system.
“However, advisers are frequently so busy they save documents under unclear file names and with very little metadata, so we and licensees do not know whether they are saving the right documents against the right metadata. That became an administrative burden for licensees, so we built the model and trained it using datasets based on properly labelled and tagged documents. Now, with Google Cloud, we have a product trained to recognize 21 document types, take key metadata such as the name of the adviser and the name of the customer, and save the document into data warehouses for use to build reports and applications.”
A second key use case addresses the limitations of audits of limited sample sizes in determining whether advisers are meeting commitments set down in advice documents. “Licensees are on the hook to ensure advisers have generated advice documents that reflect what the customer wants to achieve, relevant risk profiles, and other measures,” explains Craig. “We’ve used Document AI and Vision AI to create a product called document extractor that pulls data points such as investment recommendations, risk profiles, and fees from advice documents and saves them as structured data.
“This enables us to use AI to look at this data in real time to compare the documents customers signed off on with outcomes.”
“[The platform of the future, which is becoming more about using data and technology to power transformational business solutions] is driving our wave of innovation and development, and Google Cloud is a key component of that because we need access to the tools, technologies, and capabilities to develop and deliver these solutions and operating environments.”
—Craig Apps, Head of Innovation, HUB24Apigee powers API management
With APIs a critical component of its strategy, the business turned to Apigee API Management. “APIs enable us to provide data feeds to our clients, build applications for internal and external customers, and integrate with multiple counterparties to facilitate trading and portfolio management,” explains Craig. “Given that APIs run from our private cloud to several public clouds, we needed an API management platform to help us monitor traffic and analytics and keep client data protected.
“Apigee API Management delivered what we needed from an API management platform, while the ease of publishing APIs internally and externally was another key driver for us,” he adds. “Apigee API Management uses the Swagger interface description language that we were already working with to describe the structure of our APIs and supported our future architecture plans through its out-of-the-box extensions that work well with other Google Cloud services.”
The business views Apigee API Management as key to enablement of its cloud-native microservices architecture, as its cross-platform capabilities enable the business to connect legacy and cloud-native workloads across on-premises and public clouds with APIs. It also uses the platform to provide a developer portal and distribute API documentation to internal and external clients.
HUB24 is challenging the traditional role of platforms as custodians of assets to generate value or “platform alpha” to create multiple sources of value for clients. “The platform of the future is becoming less about regulatory oversight and custodial structures to hold assets and more about using data and technology to power transformational business solutions to solve key challenges for financial advisers and their clients and to help deliver cost-effective advice,” says Craig. “That is driving our wave of innovation and development, and Google Cloud is a key component of that because we need access to the tools, technologies, and capabilities to develop and deliver these solutions and operating environments.”
“Generally speaking, advice costs on average up to A$3,500 up front and A$3,500 ongoing, and licensee services costs are a contributing factor—advisory firms are paying on average A$50,000 per adviser per year for these, and if we can reduce that with the assistance of Google Cloud, we can reduce the cost of advice, making it accessible to more Australians.”
—Greg Hansen, Senior Business Strategy Manager, HUB24Refocusing on infrastructure and application optimization
With its AI and machine learning team now delivering products and features to the market, the business is now refocusing on infrastructure and application optimization. Running containerized applications in a managed production-ready environment presented an opportunity to secure some considerable efficiency benefits while changing the way the business develops and delivers applications to users. The business deployed Google Kubernetes Engine, and using the product with kubectl manifest yml files has dramatically reduced the reliance of its development team on its infrastructure engineering teams, saving 10 to 40 hours of effort for every new application deployed when compared to an on-premises infrastructure.
“We are now embarking on an infrastructure-as-code journey, trailing the Terraform tool to provision Google Cloud resources,” explains Craig. “It is great to see Google’s investment in open source tools like this and its willingness to provide a repository of recipes and patterns for Google Cloud services.”
In addition, as part of its push to the cloud-native microservices architecture, HUB24 is using Pub/Sub as an easy-to-configure asynchronous communications medium for these services, while providing the capability for the business to stream Pub/Sub messages over WebSockets.
Furthermore, the business is investigating its database usage and modernizing its data pipeline to ramp up its data storage and analytics capabilities.
Overall, HUB24 believes its products and solutions can help reduce the cost of delivering financial advice, which Greg argues is a key impediment for many prospective clients. “Generally speaking, advice costs on average up to A$3,500 up front and A$3,500 ongoing, and licensee services costs are a contributing factor—advisory firms are paying on average A$50,000 per adviser per year for these, and if we can reduce that with the assistance of Google Cloud, we can reduce the cost of advice, making it accessible to more Australians,” says Greg.
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About HUB24
HUB24 Limited is a company listed on the Australian Securities Exchange. The company consists of the award-winning HUB24 platform, HUBconnect business, and Xplore platform. HUB24 offers advisers and their clients a comprehensive range of investment options, including market-leading managed portfolio solutions and enhanced transaction and reporting functionality. As one of the fastest growing platforms in the market, the platform is recognized for providing choice and innovative product solutions that create value for advisers and their clients. HUBconnect focuses on leveraging data and technology to provide solutions to common challenges for licensees and advisers and enable the delivery of professional advice to more Australians.