Front End

iress.com

Andrew FosterHead of Private Wealth Management

September 2016

What can we do to improve the customer experience?

Current state InfluencesImproving customer

experience

Discussion themes

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Current state

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Conflicting expectations?

Regulator:Information

VisibilityExpertise

ConsistencyDocumentation / evidence

Clients:InformationAttentionAccess

The ‘right’ outcomeReasonable cost

Performance

Wealth Managers:

ProfitabilityEfficiency

Lower costsIncreased revenue

Managed risksPredictability

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Change is a constant

• Digitalisation• New entrants and

business models• Client focus and

retention• Talent scarcity• Platform

rationalisation• Market

consolidation

Market disturbance • Re-entry of banks • Vertical integration• Automation • Advice consistency• Cost and revenue

pressure • Regulator

encouragement

• Changing demographics

• Digital expectation• Trust and security• Channel

preferences• Advice v. guidance• Omni-channel

experience

• Differentiation by segment

• Restoration of Trust• Suitability• Price / cost

transparency• Flexibility

Client expectations• Increased intrusion• MIFID II • FAMR • CRS (Common

Reporting Standards)

• SMR (Senior Managers Regime)

Regulation change• Pensions Freedoms• FATCA• CRD IV• RDR – fee

transparency and sunset clause

• Data protection regulation

• Innovation • Greater use of data

e.g. pension dashboard / banking APIs

• Entry of tech players to market

Technology driven• Ageing and

complex legacy systems

• Under investment• Consolidation• Info sec• New models • Insource v

outsource

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£10m+

£1m -10m

£250k - 1m

£50k - £250k

• Cash • Group pensions• Personal

pensions• ISAs• UK equities• Unit trusts /

OEICS• Large Cap• Balanced• Passives

• Annuities• Protection /

Insurance

• SIPPs• Unit Trusts/OEICS

• Small-mid cap sectors

• Emerging Mkts• On-shore bonds• Off-shore bonds• Income drawdown• FX• Established

market equities• ETF’s

• Structured products

• Hedge Funds• Derivatives• Property funds

/collectives• Private

placement• Global equities

• Trust planning• Fiduciary services• SME: value extraction• Specialist tax advice• Cross border strategies• “Team of experts” (legal

etc)

• Comprehensive financial planning (Ongoing)

• Pension consolidation• Tax advice• IHT / Estate planning

• Financial planning (One off)• Simplified / Focussed

advice• Guidance and information• Retirement planning• Post-retirement planning

(50+)• Child savings

Mas

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Product needs Financial advice needsAssets

Hig

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Participants are typically found to operate across client segments and therefore client needs. This requires flexibility and capability across product and service propositions, frequently a challenge with legacy technology.

Complex business models

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Influences

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69% Baby Boomers RetiringEvery day in the US.

Changing market

10,000More likely to feel confident that they can achieve their life goals if they have a written plan in place, compared to no plan.

3xConsumersSeek financial advicefrom sources otherthan a financial adviser.

More in retirement savings of the advised to the non advised.173%

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7.6bnOnline advice

Consumers seekfinancial advice online

Digital

Banking transactions

Online

Mobile phonesAcross the world, exceeding the number of people inthe world

Expect customer facing staff to have a single view of them in real time70%

41% 85%

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Changes to advice model

• Handles high complexity and inter-dependent strategy decisions

• Comprehensive feature set

• Advice provided with adviser and client together, facilitated by technology

• Engaging experience, less complex

• Fast & highly repeatable, but less flexible

• Non-advice

• Highly brand-ableand configurable

• Integration to Product Manufacturer

• Highly brand-able, consistent language and presentation with brand

• Simple advice problems and options

• Built for scale, so want to ensure limited need for human help

• Very simple calculations & problem solving – easy to understand

• Tightly linked to human support channel who have same view (screen share)

Holistic AdviceGuided Advice: Face to Face Execution only

Self-directed “Robo” advice

Guided Advice: Phone / Online

Full Service No service

Advice models have evolved and increasingly cover a breadth of different propositions, often with multiple forms in the same organisation.

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• Advisory Services

• Investment Services

• Research

• Portfolio Management

• Market Data

• Trading

• Order Management

• Analytics

• Client Management

• Research

• Business Automation

• Financial Planning

• Goals based planning

• Access to investment products

• Digital access

• Robo

Integrated wealth management

Integrated Wealth

Client Management

Advisory Services

Discretionary Management

Execution Only

Financial Planning

Consolidated reporting

Access to specialist services -

e.g. Tax

Digital servicing

Robo

Broking Advice

A large and growing number of participants now provide a range of services. These span execution only, private asset management, advice, digital servicing… and usually span multiple legacy systems.

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Complex operating modelsBusiness models have evolved through regulatory censure and reform, market structure, client expectation, and revenue pressure. The operational demands of an integrated wealth model are complex and increasingly evident.

OutsourcedServiceProvider

Robo AdviceExecution Only

Lombard Lending

Discretionary

Investments

Tax Specialist

Digital Servicing

Consolidated Client Reporting

Retail platforms

Discretionary Management

Estate Planning

Advisory Fiduciary

Financial planning

Legacy manufacturers

IntegratedWealth

Manager

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Putting it all together

Digital

Changing Market

Changing advice model

Complex operating model

Integrated wealth management

Regulator:Information

VisibilityExpertise

ConsistencyDocumentation / evidence

Clients:InformationAttentionAccess

The ‘right’ outcomeReasonable cost

Performance

Wealth Managers:

ProfitabilityEfficiency

Lower costsIncreased revenue

Managed risksPredictability

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Improving the customer experience

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Client centred architectureConnectivity

Accountopening STPTrade mgmt

Mortgage trackingForms

Advice Production

ModellingStrategy engineDocumentation

Disclosure

Wealth Management

ReportingModelling / Rec’s

Aggregated holdings & history

Tracking

Professional Research

Insurance Retirement

savings Mortgage Investment

Qualitative & Quantitative

Client DigitalSecure

Fact findSelf-discovery

Portfolio & progress checkingOnline reporting

Compliance Management

Alerts & checksAudit & historyConsistency

Revenue Management

DisclosureBusiness mgmt.Fee collection &

Payments

Client& CRM

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Servicing multiple channels

Compliance & Risk Management

ONLINE

Know your client / Attitude to Risk / Capacity for Loss / Fact Find / Gap Analysis

Advice Preparation

Advice / Investment Recommendations

CLIENT

DIGITAL FACE TO FACEPHONE

Automated Advice

Servicing

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Digital – it’s not just about the advice

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Video and call enabling

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Starting out in self-directed

James, 26

Just got a new job with a big pay rise. He’s decided to get serious about saving for a house deposit with his girlfriend as they moved in together and the rent is expensive.

How much do I need to

save?

Where should I be investing my money?

Is thisthe right

investment mix?

What’sthe right

investment option for me

That looks good. Can

you set it up for me?

DO

MYS

ELF

IRESS XPLAN CLIENT ONLINE

DO

WIT

H A

N A

DVI

SOR

SELF DIRECTED

Instant messageWould you like tospeak to someone?Phone or face to face

Email promptSet up an investmentaccount online

How am I tracking

towards my goal?

Email outAdvice docs + linkto portfolio

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Digital Advice Delivery

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Same solution, different skin

Unified financial services technology

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