Advisor Platform Integration At The Point Of Contact

Craig Saint-Amour & Colin McClive

Microsoft Corporation

Why women live longer than men?

6th place

5th place

4th place

3rd place

2nd place

And the winner is:

Advisors Have Many Forms In Many Industries

Customer

Banking Insurance Capital Markets Institutional Independents

Private Banking

Trust/Private Banking

Brokerage

Brokers

Agents Portfolio Mngmt

CPAs Pension Mgt

Treasury Advisors

Estate Planning

RIAs

Reg. Rep.

Attorneys Master Trustees

Investment Products

Sources: Tower Group and others

Wealth Mgmt.

• Increasingly knowledgeable consumers who demand high value for services

• Desire for convenience and access to new service/delivery configurations

• Growing dichotomy between advice-oriented and self-directed customers and products/transactions

• Commoditization of products/transactions, leading to service and value becoming key differentiators

• Globalization requiring greater coordination

• Deregulatory environment fostering active cross-industry competition

• Rapid industry convergence creates universal banks capable of delivering banking, insurance, and investment products

• Emergence of non-financial institutions as viable competitors

• Emergence of alternative distribution channels

• Improvement of customer information management, incorporating database marketing and other sophisticated approaches

• Integration of multiple channels into single, uniform delivery system

• Added pressures to expand market share, improve profitability, increase efficiency and offer a broader range of financial products and services

• Increased focus on revenue growth, particularly through non-interest income sources

• Significant movement to fee based annuity revenue vs. commissioned based revenue models

Increasing CustomerSophistication

Technology Changing Basis Of Competition

Broadening Scope ofCompetition

Increasing Focus on Growth and Diversification

Trend

Source: Accenture

Impacts

Business Trends Driving The Advisor Environment

Tools/Technology Trends Affecting The Advisor And Advisor Network

Tools/Platform • Integrated Solution Market is still immature -

plethora of point solutions and a handful of medium size, regionally focused providers.

• Longer market staying power is a key buying decision criteria

• Tools are not meeting the needs of the Advisor community

• Financial planning as unifying process and tool for customer relationship mgmt.

Technology • Integration of channel strategies (online,

workstation, call/service centers) • Emphasis on enhancing front office

capabilities and linkages to existing middle and back office infrastructure

• Balance between servicing efficiency and personalization is critical placing huge requirements on technology scalability and scope

Tools/Platform • Increasing awareness of inefficiencies in field

workflow & business process and its relationship to low adoption of advisor workstation tools

• Broaden platform offerings to serve major end-customer segments -- the mass market, mass affluent, and high net worth

• Use of workstation & customer data strategy to “institutionalize” customer relationship

Technology • Collaborative technology capabilities required

internally & externally • Loosely coupled integration via web services

becoming a required capability• Technologies must support the transformation

of current sales force from “transaction agents” to "trusted advisors"

Today customers demand holistic advice and guidance…

BanksExamples: Wells Fargo, Barclays, WachoviaBanks moving up-market into mass affluent segment

Insurance Companies Examples: Northwestern Mutual, AXA,MetLifeEstablishing trust charters in order to find new sources of revenue growth

New Specialist BoutiquesExamples: Virgin Direct, Intelligent FinanceOffering niche products and services to highly profitable segments of the market

BrokersExamples: Merrill Lynch, Charles Schwab/US TrustPursuing mass affluent aggressively as source of stable fee-based income

Source: Celent Communications

Deposits12%

Stocks14%

Insurance products

6%Defined contribution

plans12%

Other*1%

Real estate25%

Fixed income10%

Mutual funds15%

Business & partnerships

5%

Types of assets held by high value customers

Advisor Firms Are Challenged By:

• Aligning their talent pools and expertise with ability to penetrate customer bases deeply with many product offerings

• Optimizing the “institutional” value along with the individual advisor value

• Creating differentiation in a highly competitive environment

• Increasing productivity on an existing expense base

• Responsiveness to customer demands

• Increasing importance of compliance on day to day activities

• Addressing many different customer segments across industries, products and competencies

• Balancing of processes between standardization/sophistication and customization/simplicity

Advisors Have Challenges Also…• Financial Services Professionals (bankers, brokers,

agents) desire ways to• Spend more time with clients, and less time

behind the computer• Collaborate more frequently & fully with

customers in the financial sales process• Effectively use members of the planning team and

specialists in a collaborative fashion• Grow client relationships – become a “Trusted

Advisor”• Limited ability to collaborate with specialists

efficiently • Delivering differentiated advice, customer insight

and service• Financial advisors are best placed to serve

customers however they are hampered by a lack of tools and support

• Serving transactional AND advisory needs, and a diverse customer base

Financial organizations must develop a platform to support financial advisors to provide and implement advice effectively and efficiently

Microsoft’s Special Value

Microsoft’s Special Value

• While the advisor platform is typically partner technology, Microsoft integrates the advisor platform into the enterprise context

• With enterprise infrastructure like identity and directory services

• With the collaboration tools familiar to your employees like Microsoft Office and Outlook

• With business intelligence and financial analytics

The Advisor Platform in action

Financial ProductManufacturers

• Wills/attorney• Trusts/trustee services• Estate management

• Personal mortgages

• Investment lending

• Business capital• Business lending

• Life insurance• General insurance• Health insurance

• Managed funds• Direct securities• Real estate

Customers• High net worth• Mass affluent• Businesses

• Budgeting• Income planning• Cash management

• Tax structures• Tax returns/reporting• Tax minimisation

• Pensions• 401k• Superannuation

Taxation

Cashflow

Investment

Retirement

Risk

Debt

Estate

CollaborationCollaboration

CollaborationCollaboration

Source: Microsoft/Accenture

Financial Advisor

Advisor Platform Solution Overview

Common Channel services / Multi-channel Architecture

Business Integration Platform

AccountsProcessing

Portfolio Processing

PolicyProcessing

OtherProcessing

Asset Allocation

Reporting /Analysis Services

Advice Engines Pricing/Alerts

Customer

Product Definition

ServiceDefinition

Scenario Builder

GL / Back-office

Product-specific processes with reusability

potential

Product and service agnostic

processes

Distribution Channel

Applications

CallCenter

Branch orAgency Mobile Internet Agent or

Broker

Application Server Platform

ProcessingApplications

Product and services specific processes

Market Data and Value Chain Partner Connections

The Advisory Platform Technical Architecture

Advisor Platform Business Flow – End-to-end integration is the key to achieving business results

Customer Information CRM

Sell

ProfileExecute on Plan

Create Plans

Prospect

ManageExisting Clients

Attorney CPA Trust Officer

Funds Manager

Stock Broker

Customer•Self-Service (Monitor, Change, Message)•Receive proposals•Receive alerts

Phone Email Fax IM Mobile Office Visit

= Company services supporting= External and/or Internal collaborators

Financial Advisor/ Account

Mgr/Agent

Financial Advisor/ Account

Mgr/Agent

Ad hoc stock sales and purchases

Partner Options for Advisor Platform Functionality

Proposal & IPS Generation

Comprehensive Planning

Investor Profiling

Client Reviews & Reporting

Investment Selection & Portfolio Construction

Lead, Opportunity,Client & Campaign Mgnt

Portfolio Management Alerts & Rebalancing

Account Opening, Trade Execution & Product

AdviceAdviceAmericAmericaa

360 DegreeAdvisor Portal

Integrated Stack ValueWe are the Factory Team

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ASP.NETASP.NET

Business Process LayerBusiness Process Layer

Data LayerData Layer

Application FrameworkApplication Framework

Web ClientsWeb Clients

InfrastructureInfrastructure

• Micro-Browser• SMS• Smart Client

Pocket PC

• Email Management• Fax Server

E-Mail/Mail/Fax

• Browser• Web Chat• Collaboration

Web

• CTI• Telephony• Voice Portal

Phone

• Disconnected Mode Access

Laptop PC

Corporate Services (Internal/External)

Knowledge Management

Self Service

Workforce Effectiveness

Workflow & Channel Presentation

Data Consolidation (Presentation)

Collaboration

Profitability

Compliance & Accreditation

App

licat

ion

Inte

grat

ion

Products & Research

Activity Management / Workflow

Document Management

Case Collaboration with Specialists

Training & Help

Advisory Services

Sales Asset Allocation Market InformationService

Client ServicingAdvisor Servicing

Fact Find / Goals

Plan Creation / Simulation

Plan Monitoring

Portfolio Optimisation

Recommendation Engine

Implementation(Quote / Application)

Report Generation

Advisory Support Services

Contact History

Customer View

Customer Preferences

Customer Treatment

Customer Insight

Client Data BaseContact Management

Profiling

Alerts

Marketing

Customer Treatment

Lead Generation / Reporting

Access

Advisor Details

Firm Management Product

ManufacturingClearing

Core Transaction

Systems

CustodyOperations Support

Productivity Services

Outlook(Diary, Todo, Task List, Inbox, Application Launcher)

Speech Server

Sharepoint Services/K2Meridio

Sharepoint Services/Office

Sharepoint Services/Office

MS CRM

SQL Business Intelligence/Office/Reporting Services

AdviceAmericaAdviceAmerica Bloomberg.com SQL Business

Intelligence/Office/Reporting Services

AdviceAmericaAdviceAmerica

Advisor Platform Provides Key Functions To Support The Advisor, The Customer, And The Industry Service Providers

Advisor Platform Solution Value

Benefits Of An Integrated Advisor Platform

Enterprise

• Increase Share of customer wallet

• Increase number of customers per Advisor

• Provide a holistic view of the customer which will enable a broader client relationship and enhance customer loyalty

• Provide an increased understanding of the customer portfolio which accelerates a deeper penetration of newly introduced products

• Reduce costs through elimination of redundant systems and optimizing remaining systems

• Lower the risk of unauthorized access to valuable customer and transaction information

Enterprise

• Increase Share of customer wallet

• Increase number of customers per Advisor

• Provide a holistic view of the customer which will enable a broader client relationship and enhance customer loyalty

• Provide an increased understanding of the customer portfolio which accelerates a deeper penetration of newly introduced products

• Reduce costs through elimination of redundant systems and optimizing remaining systems

• Lower the risk of unauthorized access to valuable customer and transaction information

Customer

• Insure all customer segments are fully serviced

• Enable a “channel of choice” mechanism for all customer segments

• Create a collaborative environment to improve and accelerate/enhance decision making

• The right product for the right need

• Advice and service when needed

• Holistic, lifestyle financial planning and management

• Confidentiality

Customer

• Insure all customer segments are fully serviced

• Enable a “channel of choice” mechanism for all customer segments

• Create a collaborative environment to improve and accelerate/enhance decision making

• The right product for the right need

• Advice and service when needed

• Holistic, lifestyle financial planning and management

• Confidentiality

Advisor

• Advisor efficiency

• Increased customer touch opportunities – virtually, face to face and online

• Attract and retain advisors

• Upskill service/sales staff to Advisor

• A seamless process for the entire financial lifecycle

• Familiar tools which accelerate customer response and efficiency

Advisor

• Advisor efficiency

• Increased customer touch opportunities – virtually, face to face and online

• Attract and retain advisors

• Upskill service/sales staff to Advisor

• A seamless process for the entire financial lifecycle

• Familiar tools which accelerate customer response and efficiency

Customer Evidence

Rapid response to ever changing market needs

• Greater service efficiency

• Higher customer satisfaction

• Increased customer retention

• Lower training costs

• Opportunity to drive new revenues

• MetLife needed a custom solution for their Advisor platform to respond to the market in just 3 weeks. This included design, coding, testing and deployment of the solution. Not having the solution when needed would cost MetLife business and dollars. It would require nothing short of a Herculean effort.

“Being able to effectively react to an immediate business need for a target market segment is priceless. Especially when the real cost is small, the opportunity is large, and the reusability factor is high. Impact and their use of Microsoft’s platform made it a no brainer.”

--Dan WeinbergerAssistant Vice President, Individual Business Sales Tools and Marketing

Communications, MetLife Group, Inc

• Impact Technologies deployed its Plan Lab Office solution by utilizing its existing framework and architecture built on the Microsoft platform. The solution not only met MetLife’s immediate need but can be leveraged in the future on other initiatives.

Trusted Advisor through an integrated platform

• Increased ability of the financial advisor to better understand their client's needs and become "their trusted advisor"

• Advisors have seen a marked improvement in sales, customer satisfaction and employee experience

• The Bank needed to spend more time with their customers to better understand their needs and to provide holistic financial planning and service through a vast network of over 1,000 advisors

• AdviceAmerica Software Platform for Financial Advisors

• Web based capabilities utilizing Microsoft SQL Server and the .net development environment

Quotation needed of some kind

Reach & convenience through mobile devices

• Sub second delivery of prices and information to users anywhere insuring traders are fully informed or market conditions and can manage risk more effectively

• 100% increase in the number of trades

• Increased customer base who are attracted by possibility of trading anytime, anywhere

• Cantor Fitzgerald is a global financial services firm with operating units involved in a variety of market-based businesses and is the leading privately held inter-dealer Cantor Index saw the potential for wireless technology but it had to deliver a quality of information as high as that available online, deliver prices to end users in real time, and enable them to transact immediately.

• Cantor Mobile rolled out to Cantor Index traders

• Microsoft Mobile based Pocket PC

• weComm’s WAVE platform

“We have gained a lot more customers, many from our competitors. They have come to us purely for this product because no-one else offers it. It gives us a reputation for innovation and actually sets us ahead in terms of the curve of technology. I believe this makes us the most technology savvy company in our industry right now.”

Alex Huckleby, Head of Wireless Services, Cantor Index

Engaging with Microsoft

Engaging With Microsoft

• Contact your Account Executive

• Define primary pain areas and most significant area of business opportunity

• Develop an initial solution blueprint with Microsoft and our partners

• Establish a Proof of Concept

• Design the optimal implementation and support plan for the solution

• Deliver the solution to the Enterprise

More information

• Microsoft in Financial Services• http://www.microsoft.com/resources/financialservices

• Financial Services Developer Community• http://www.financialdevelopers.com

• Case Studies• http://www.microsoft.com/casestudies

• Web Services Developer Center• http://msdn.microsoft.com/webservices

• .NET Connected Web Services solutions• http://www.microsoft.com/net/directory/

• Windows in Financial Services publication• http://www.windowsfs.com/

© 2005 Microsoft Corporation. All rights reserved.This presentation is for informational purposes only. Microsoft makes no warranties, express or implied, in this summary.