BFS White Paper - WM Advisor

www.niit-tech.com
Enabling the Advisor Investor Relationship –
Role of Digital Services
Pranav Dhar
Practice Lead - Banking & Financial Services
NIIT Technologies White Paper
CONTENTS
Executive Summary
3
The Business Case for Digital Technologies
4
Digital Technologies: Enabling the Smart Advisor
5
Adoption of Digital Analytics for Enhancing the Advisor – Client Relationship
6
Collaborative Technologies for the Informed Investor
6
Conclusion
6
INVESTMENT
FINANCE
CAPITAL
BANKING
INVESTMENT
WEALTH
FINAANCE
MARKET
INVESTMENT FINANCE
CAPITAL
CARGO
ECONOMICS
FINANCE
REVENUEREVENUE
MATKET
INVESTMENT CAPITAL
CAPITAL ECONOMICS
MARKET
FINANCE
Executive Summary
FAs from all age-cohorts...
The demand for wealth advisory is growing manifold. The
revolution is driven by an aging demographic, new wealth created
in emerging economies and an expanded range of financial
investments. In addition, many of these investors fall into
Generation D, the digital generation. They are approximately 75M
• 17% Boomers, 52% Gen X, 24% Millenials
Who are heavy technology users...
• 94% Computer Use
• 80% Tablet
• 93% Smartphone
in the USA and are comprised of Millennial, Gen Xers and
Boomers. They are deeply digital, cultivated and educated and
represent $27 T in net worth. The market for advice driven financial
management is 35% while self-directed is 41% and only 12% are
knowledgeable about investing. In general they tend to use digital
tools at a high rate.
Who use digital channels with clients + peers
(when allowed)
• 51% daily social media contract with clients
- 54% found/converted clients
• 54% (vs 35%) say clinets prefer those channels
• 61% building/connecting with referral sources
• 54% online conversations with industry peers
These factors are making wealth management more complex and
drive change to the service model that has been in place for
• High rates of all digital touchpoints, including FB (+28%), IM
(+24%), text (+16%), twitter (+33%), LinkedIn (+19%),
skype/video chat (+34%)
many decades.
And handle more accounts with more $...
The course for investments and the opportunity in wealth
• 50% total account value > $20MM (+130%)
management are obvious. The market is large and expanding, so
• 90+ clients on average (+13)
is the demand for wealth management services. The global wealth
held by high-net-worth individuals (HNWIs) is expected to grow
• 57% “dedicated” clients (+8%)
• 65% with clients in $5M-19.99M range (+20%)
• 44% with clients in $20M+ range (+10%)
from 6.5 percent annually to US$ 55.8 trillion by 2015. The Asia
Pacific region is expected to grow at CAGR 9.8 percent, Middle
East at 6.8 percent, Europe at 6.2 percent and North America at
In this new environment, Wealth Management firms are compelled
5.7 percent.
to innovative and offer disruptive technologies to financial advisors
as better means to understand, service, and communicate with
While financial institutions position themselves for business growth;
their clients. Many firms have taken initial steps with social media,
there are multiple challenges they face today with the outlook
mobile, cloud and data analytics. However, they are still searching
becoming increasingly complex. Competition has intensified (shift
for an effective wealth management business models for enabling
to discount brokers and RIAs) while regulatory oversight has
Advisor-Client relationships and ROI for conducting business.
increased. An increased client/advisor churn has added to the
margin pressure that persisted against the backdrop of successive
This paper primarily focuses on the importance of digital
global financial crises.
technology in Advisor-Investor Relationship Management and how
this effectively helps wealth management firms in positioning
themselves as leaders in the market.
3
The Business Case for Digital
Technologies
Digital Technologies: Enabling
the Smart Advisor
Full-service wealth management firms are no strangers to digital
Digital Solutions offer substantial benefits in terms of assisting
investment: They’ve spent huge sums to furnish advisors and
advisors in carrying their information load such as client data,
clients with direct online connections to the firms. These big
regulatory or product information, market data and news, or just
brokerages, private banks, life insurers, and investment firms:
portfolio details. There is however, tremendous value to be derived
• Spend hundreds of millions building advisor platforms. Merrill
by considering the dynamics of Advisor’s circadian events in
Lynch, for example, is widely reported to have spent $1 billion
developing
its
wealth
management
workstation,
designing digital solutions relevant to wealth industry.
which
seamlessly integrates the account data, customer records,
The investments in the next generation digital technologies allows
transaction systems, and planning tools that financial advisors
financial advisors to spend more time in diagnosing client needs,
need to run their businesses.
circumventing poor customer experiences, offering targeted
solutions and building relationships while providing transparency in
• Spend tens of millions enabling their clients to serve themselves
executing transactions to differentiate themselves from their
online. Secure client websites, mobile apps, and the back-end
competitors. Once improving the client experience and relationship
integration required to support them have cost most firms tens
is recognized as the key challenge for advisor solutions, we can
of millions of dollars to build and maintain. It’s a smart
see the various solution functions in a different light.
investment: 80% of US affluent online adults visit their
• Social Media Interaction
• Client Referrals/Campaigns
• Investor/Advisor Communities
• LinkedIn Profile & Connections
investment firms’ websites at least a few times a year.
• Barely support the advisor-client relationship online. While direct
IDENTIFY
connections between a firm and its advisors and clients are
critical, the most important relationship at a full service firm —
between client and advisor — is one that goes largely
unsupported in digital channels.
Digital solutions for advisors have the potential to make wealth
ASSESS
• Client Profiling via
Social Media
• Media Center for
Learning
• Financial Planning
Tools
• Investment Analytics
• Contact Management
• Interactive Portfolio
Reviews
• Alternate
Investments
RELATIONSHIP
• Reports on the go
management better by improving the advisor‐client relationship
substantially. Access to their CRM systems has been top of the list
of functions that advisors have wanted on their mobile devices but
they have also wanted to have broker workstation functions,
portfolio management systems and research systems. While these
function areas are highly important, the greatest benefit of digital
technology is the help it can provide in embedding these functions
within a successful client interaction.
The adoption of digital technologies reshapes the way services are
provided to wealth management clients. Although, traditional
HNWI-private banking relationship delivers a seamless experience;
technology will radically re-define and enhance that relationship.
Wealth managers that focus on providing connected experience
through digital technologies will achieve: Enhanced Client
Experience; Increased Client Intimacy; Durable and Profitable
Client Relationships.
PLAN
• Financial Proposals
• Model Portfolio
Creation
• Digital client
onboarding
• Investment
Management
• Service & Alerts
• Rebalancing
GROW
Digital Technology Impact on Advisor Business Cycle
1. Introduction & Referrals Jeff, a Wealth Advisor is targeting Vice
Presidents at a prominent Technology startup at Silicon Valley.
He discovers using Marketing Analytics that one of his clients at
Microsoft is associated with the same technology community
board as Dan, one of the target prospects. Jeff requests his
client for an introduction to Dan.
2. Financial Assessment Jeff obtains an introduction and
prepares, using Social media and Analytics tools to hypothesize
on Dan’s personality and social behavior and creates a Story
Board for the meeting. Dan likes Jeff’s approach and readily
shares his risk tolerance and provides income statements and
documentation for image capture via his tablet.
4
3. Proposal Presentation Jeff uses investment assessment tools to
analyze Dan’s current portfolio and identifies recommendations
that optimize risk/return and tax efficiency based on Dan’s
profiling. Jeff generates an interactive proposal supported by firm
and third-party research that shows impact of conflicting goals,
and to calculate financial projections.
Adoption of Digital Analytics for
Enhancing the Advisor –
Client Relationship
As wealth firms integrate their capabilities around data capture,
analytics, automation and multi-channel presentation, a new class
of context aware digital solutions have emerged. They are able to
4. Portfolio Design Jeff reviews and adjusts his proposal to be
risk-optimized, using an investment design tool.
“think” by collecting data and help in arriving at a set of conclusions
to make effective recommendations easily accessible to the advisor
and the client.
5. Account Opening E-Onboarding solution takes Jeff’s finalized
proposal and obtains provisional approval. Jeff confirms the
Help financial advisors identify, engage, and close more
provisional terms, captures images of Dan’s SSN Card and a
opportunities
funding cheque and initiates account open process via
Predictive analytics empowers decision makers to visualize and
e-signature, while fulfilling compliance requirements.
understand what tomorrow presents in opportunity and risk. When
developed correctly, analytics delivers real-time insight into
6. Portfolio Management Jeff relies on Service Management and
Tracking tools to alert him to any issues in the transition and
reinvestment of Dan’s assets.
7. Service Profile Jeff works with his team to set up intelligent alerts
and service preferences for Dan. Dan grants Jeff access to his
external assets aggregator.
8. Client Relationship Jeff regularly contacts Dan with investment
ideas triggered by Firm and 3rd Party Research. Dan shares
investment reports with other VP colleagues at work, and helps
arrange a meeting to introduce them to Jeff, leading to a future
referral or cross-sale.
9. Portfolio Review Dan is pleased that Jeff can conduct the
quarterly portfolio review through an interactive video conference.
Jeff is able to discuss performance effectively by making sure that
key facts are automatically emphasized with interesting graphics,
present investment alternatives on the fly, and shows Dan his
improved risk/return profile (what-if scenarios) based on
decisions taken during the meeting.
customer behavior. Wealth firms can enable financial advisors to:
• Cross-sell: Find the next-best offer for each client for the coming
sales period. Several channels can be used to contact these clients.
• Perform sales system optimization: Establish which products
and clients to focus on in order to maximize campaign budgets.
• Develop and support micro campaigns: Leverage insights
developed across a broad set of data sources.
Enhanced Service Experience
• Evaluate data, documents, and communication to identify broad or
individual client service issues. These systems allow advisors to know
and respond to poor interactions their clients had with wealth firms. It
also allows managers to address broader client service issues.
• Apply predictive analytics and adaptive learning to generate
recommended responses for advisors.
To improve client service levels, advisors need the ability to distill
insights from client’s preferences and risk appetite, and combine it
with relevant data on markets, news, peers, social and
performance. Emerging technologies such as unstructured data
analysis, big data and cognitive computing now provide the key
abilities to achieve this objective.
5
Collaborative Technologies for
the Informed Investor
Conclusion
Financial advisors, in performing their day to day work, are viewed
as only about 60% efficient due to the extensive number of
Advisor solutions and client apps with identical or very similar
feature sets can be empowering for advisor and client alike. The
kinds of functions that would really enhance an advisor / client
collaboration would comprise:
applications they use to complete their day to day work and the
fact that, in most cases, integration between them is quite limited.
This has generally been the desktop experience. A proliferation of
tools, none of which work together effectively.
1. The ability for the advisor to prepare by creating a story-board of
the meeting.
2. The ability to generate model portfolio and tentative proposal for
the client.
In addition, as clients demand more transparency and information
about their holdings and direction they should take for their
investments, the advisors needs more sophisticated and
complete information.
3. Digital signature so that documents can be lined up in the
solution for the client’s agreement .
4. Note-taking for the advisor to carry out follow through actions
after the client meeting.
5. Content management that allows advisor to line up exactly what
they want the client to view in the course of the meeting
(product outline, videos and multimedia for new investment
avenues, forms and proposals, investment research, compliance
There is widespread perception that the winners in the wealth
management space will be those who move from paper to online
and mobile channels, from spreadsheet to visualization, from a
limited view to 360-degree client relationship data, and who can
improve the experience of each client interaction. This will result in
an increase in wallet share and assets under management, and
enhanced advisor productivity.
guidelines, etc.).
6. One touch contact options, including phone, e‐mail, instant
messaging and geo location for clients and wealth firm back
office staff.
7. Video conferencing – if the advisor wants to draw office‐based
References
1. PWC – Rise of Digital and Social Advice in Wealth Management
2. IBM Watson – Smart Machine Era
3. MyPrivateBanking Research
staff to provide, say, expert opinion about a portfolio ‘overhaul’
or answer a client query about a product or review portfolio
performance offline.
8. Links and sharing capabilities with social media in order to better
connect to clients who are using social media (e.g. LinkedIn,
Twitter, Facebook, etc.). This will ensure that advisor and client
can keep in touch via social media after the meeting.
6
About NIIT Technologies
NIIT Technologies is a leading IT solutions organization, servicing customers in North America,
Europe, Asia and Australia. It offers services in Application Development and Maintenance,
Enterprise Solutions including Managed Services and Business Process Outsourcing to
organisations in the Financial Services, Travel & Transportation, Manufacturing/Distribution, and
Government sectors. With employees over 8,000+ professionals, NIIT Technologies follows
global standards of software development processes.
Over the years the Company has forged extremely rewarding relationships with global majors, a
testimony to mutual commitment and its ability to retain marquee clients, drawing repeat
business from them. NIIT Technologies has been able to scale its interactions with marquee
clients in the BFSI sector, the Travel Transport & Logistics and Manufacturing & Distribution, into
extremely meaningful, multi-year "collaborations.
NIIT Technologies follows global standards of development, which include ISO 9001:2000
Certification, assessment at Level 5 for SEI-CMMi version 1.2 and ISO 27001 information
security management certification. Its data centre operations are assessed at the international
ISO 20000 IT management standards.
India
NIIT Technologies Ltd.
Corporate Heights (Tapasya)
Plot No. 5, EFGH, Sector 126
Noida-Greater Noida Expressway
Noida – 201301, U.P., India
Ph: + 91 120 7119100
Fax: + 91 120 7119150
Americas
NIIT Technologies Inc.,
1050 Crown Pointe Parkway
5th Floor, Atlanta, GA 30338, USA
Ph: +1 770 551 9494
Toll Free: +1 888 454 NIIT
Fax: +1 770 551 9229
Europe
NIIT Technologies Limited
2nd Floor, 47 Mark Lane
London - EC3R 7QQ, U.K.
Ph: +44 20 70020700
Fax: +44 20 70020701
Singapore
NIIT Technologies Pte. Limited
31 Kaki Bukit Road 3
#05-13 Techlink
Singapore 417818
Ph: +65 68488300
Fax: +65 68488322
Write to us at [email protected]
www.niit-tech.com
D_66_130814
A leading IT solutions organization | 21 locations and 16 countries | 8000+ professionals | Level 5 of SEI-CMMi, ver1.2
ISO 27001 certified | Level 5 of People CMM Framework

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