Prompted by two events in the last two weeks, the FSA's paper CP10/29 and Standard Life's acquisition of Focus Solutions it's worth considering the importance of independence and objectivity in the provision of front office and financial planning tools.
For advisers. In the words of the FSA in CP10/29 “It remains … important that an adviser carefully considers the objectivity of any tools provided as they are responsible for the advice provided to the client.” As the UK’s leading provider of financial planning tools and front office technology, DT’s reputation and success has been built on our ability to deliver high quality, objective solutions. We won 16 PPP ratings in the F&TRC's recent evaluation of financial planning tool suppliers, more than any other supplier. We feel it is important that our clients and the advisers that use Dynamic Planner can trust the objectivity of the tools they use. This has been the case since founding the business in 2003 and certainly the case when the FSA itself used our technology back in 2004. Our plans as a company, board and management team are to continue to build DT and our products, successfully and independently, supporting high quality, objective financial planning, sales and servicing to the benefit of our clients.
For financial services companies. Independence is not just important from the advisers' point of view. Our clients need to know that they will have a strong voice at the table in helping set DT's product road map and priorities. As an independent and privately owned company we pride ourselves on our ability to put our clients' needs first. At the end of each month for example we complete a 'health check' asking each client on a scale of 0 to 10 would they recommend us? Over the last 8 months since starting this I am delighted to say that this Net Promoter score has moved up and up as we have focused more and more on this measure of client success. For November we scored an average of 7.8. We understand that all financial services companies are facing great challenges (as well as opportunities) in the transition to RDR and we are working with clients from across the industry to deliver powerful and innovative solutions that will help them grow and succeed beyond 2013. We are very excited by the product releases we have planned for 2011 from our forthcoming Winter release in January onwards.
For platforms and providers. Lastly as an independent supplier our programme of integrations with leading platforms and providers will mean that we can support our advisory clients with integrations to a platform of their choice. We know that leading advisory businesses want best of breed when it comes to their front office and investment platform combination and DT's programme will mean that our clients can have exactly this.
Ben
Our thoughts on financial planning and front office technology
Wednesday, 8 December 2010
Friday, 19 November 2010
RDR and practical support for advisers
It is quite common these days to read in the press that implementing the RDR will rely on the improved use of technology. One good example is Richard Mein's article in Professional Adviser published on 18 November.
Assuming that technology is a "given" , what advisory businesses could really do with now is some practical help as what they could do to assist with their RDR transition preparations. For example, if you want to segment your customers and develop specific service propositions for them, which segments do you choose, what do those propositions look like and how much might they cost?
We've been considering these issues at Distribution Technology and we've come up with some ideas. We've put together some suggested propositions for a variety of target customer segments, from the mass matket to the ultra high net worth. We'll be publishing this as a white paper next month and we're giving you advanced notice to reserve your copy. To find out more about 'sharing the problem', please contact us.
Shelley Robertson
Marketing Manager
Assuming that technology is a "given" , what advisory businesses could really do with now is some practical help as what they could do to assist with their RDR transition preparations. For example, if you want to segment your customers and develop specific service propositions for them, which segments do you choose, what do those propositions look like and how much might they cost?
We've been considering these issues at Distribution Technology and we've come up with some ideas. We've put together some suggested propositions for a variety of target customer segments, from the mass matket to the ultra high net worth. We'll be publishing this as a white paper next month and we're giving you advanced notice to reserve your copy. To find out more about 'sharing the problem', please contact us.
Shelley Robertson
Marketing Manager
Monday, 1 November 2010
Autumn preparation for RDR
Dynamic Planner's autumn release is now live and helping advisory businesses plan, sell and service their customers even more successfully ahead of RDR.
We have extended our award winning financial planning tool set with a powerful new pensions consolidation tool (more on this in the next few weeks) and our first valuations integration with Ascentric the whole of market wrap. We have also added new easy-to-use wizards to aid customer set up, workflow and fact finding.
Financial Adviser recently ran an article on Chartwell's use of Dynamic Planner over the phone to service those customers where it was proving unprofitable to support them face to face. In combination with the Ascentric integration Chartwell advisers are able to provide plan, sell and service their customers using a single easy-to-use application - ideal preparation for RDR.
Shelley Robertson
Marketing Manager
We have extended our award winning financial planning tool set with a powerful new pensions consolidation tool (more on this in the next few weeks) and our first valuations integration with Ascentric the whole of market wrap. We have also added new easy-to-use wizards to aid customer set up, workflow and fact finding.
Financial Adviser recently ran an article on Chartwell's use of Dynamic Planner over the phone to service those customers where it was proving unprofitable to support them face to face. In combination with the Ascentric integration Chartwell advisers are able to provide plan, sell and service their customers using a single easy-to-use application - ideal preparation for RDR.
Shelley Robertson
Marketing Manager
Thursday, 30 September 2010
Platform award and target operating models
We received "Highly Commended" as the "Leading platform users' planning tool provider" at Tuesday night's Aberdeen Platform Awards, coming second to Financial Express Analytics. Congratulations to the DT team and thank you to our clients. Congratulations of course to Finex too. As Finex are a partner, it's good to know we really are offering our clients, best of breed.
The judges based our commendation on the basis that DT offered the "best end-to-end solution" for the front office. From conversations on the night, it's clear that "front office" is becoming established as a category in its own right, as well as being an integral part of the Target Operating Model of choice for advisory firms ahead of RDR (Front Office + Investment Platform(s) = Target Operating Model).
Ben
The judges based our commendation on the basis that DT offered the "best end-to-end solution" for the front office. From conversations on the night, it's clear that "front office" is becoming established as a category in its own right, as well as being an integral part of the Target Operating Model of choice for advisory firms ahead of RDR (Front Office + Investment Platform(s) = Target Operating Model).
Ben
Tuesday, 7 September 2010
Process, process, process
At a recent user group the topic of FSA ARROW visits came up and the Regulator's apparent focus on the need for repeatable processes across an advisory business as part of the TCF agenda.
The FSA's move away from 'light-touch' to a new outcomes-focused approach delivered through intensive supervision is clear. They have hired 537 extra staff to make extra supervisory visits.
Ensuring that all front office processes used to deliver planning, sales and servicing are consistent and managed centrally means that the firm is better placed to manage outcomes and treat customers fairly. In preparation for RDR it also means that the operating model is more efficient.
Advisers of course are very often used to doing their own thing when it comes to advice. There is also a potentially risky mix of paper, spreadsheets, home grown tools and back office systems which inhibit the delivery of consistent processes and introduce the potential for error and misunderstanding.
So how do you introduce consistent processes without upsetting half of your advisers? Answer: Carefully. We have seen it done well and not so well.
What clearly works is the introduction of processes which obviously help the adviser; that make their lives easier. One client who has been particularly successful in this regard says that they need to make it a ‘no brainer’ for the adviser to use technology. They provide ‘bite sized’ processes using Dynamic Planner (we call them ‘tasks’) which together build into a single customer view and financial plan which can then be managed on an ongoing basis. It’s easy for the adviser and delivers a better customer experience.
Think of it as a ladder. Risk profiling or a simple investment sale is a great place to start as the bottom rung and provides a base on which fuller investment advice or more holistic planning can be built. Once the client data is entered into a front office application of course, it makes it considerably easier for the adviser to undertake the next, more comprehensive advice task or review.
The FSA's move away from 'light-touch' to a new outcomes-focused approach delivered through intensive supervision is clear. They have hired 537 extra staff to make extra supervisory visits.
Ensuring that all front office processes used to deliver planning, sales and servicing are consistent and managed centrally means that the firm is better placed to manage outcomes and treat customers fairly. In preparation for RDR it also means that the operating model is more efficient.
Advisers of course are very often used to doing their own thing when it comes to advice. There is also a potentially risky mix of paper, spreadsheets, home grown tools and back office systems which inhibit the delivery of consistent processes and introduce the potential for error and misunderstanding.
So how do you introduce consistent processes without upsetting half of your advisers? Answer: Carefully. We have seen it done well and not so well.
What clearly works is the introduction of processes which obviously help the adviser; that make their lives easier. One client who has been particularly successful in this regard says that they need to make it a ‘no brainer’ for the adviser to use technology. They provide ‘bite sized’ processes using Dynamic Planner (we call them ‘tasks’) which together build into a single customer view and financial plan which can then be managed on an ongoing basis. It’s easy for the adviser and delivers a better customer experience.
Think of it as a ladder. Risk profiling or a simple investment sale is a great place to start as the bottom rung and provides a base on which fuller investment advice or more holistic planning can be built. Once the client data is entered into a front office application of course, it makes it considerably easier for the adviser to undertake the next, more comprehensive advice task or review.
Saturday, 7 August 2010
Making room for adviser charging
"£7billion a year skimmed off our savings" ran the headline in last Saturday's Telegraph refering to the fees charged by retail funds.
While weekend papers run this kind of piece from time to time - it's clear from the prominence of this article, a third of the front page (not just the front page of the money section but of the whole paper) that this really is an issue of the moment.
The argument was as follows; on top of the annual management fee there are a range of administrative expenses which if customers really understood what was going on would be seen in many cases as unacceptable.
In an industry in which advisers are transforming their business models ahead of RDR to charge fees and the value chain from fund provider, product/platform provider and adviser is becoming increasingly transparent, greater price pressure will of course be placed on each.
What advice firms tell us is that something has to give. It can't be the ongoing adviser's fees as advisers in the future will be doing more not less. The platform fee where there is one, is already the smallest component.
The focus now as per Saturday's Telegraph is the costs of fund management.
We are seeing more and more clients and firms adopt a greater proportion of passives within their portfolio. Another route is the use of Exchange Traded Funds. Cost is a major driver for both of these strategies. RDR is likely to accelerate this trend given the requirement for independent advisers to take them into account.
But in a difficult and unpredictable market active managers argue that this is where they add their value; finding the opportunities which trackers cannot.
The difficulty here is that as high quality risk profiling of clients becomes the norm and applications like our own Dynamic Planner® (see this review in The Times) are used to help advisers work with customers to agree how much risk they ought to take on, having fund managers take risks outside of an agreed 'budget' does not work.
Increasingly fund managers have been asking us to classify their funds against our risk profiles given the widespread use of Dynamic Planner risk profiling across the industry.
We launched our Fund Risk Profiling service back in April and the level of interest has been amazing with DFMs, fund managers and providers coming to talk to us. The latest group to sign up last week was Skandia with their Spectrum funds.
The benefit to the customer and adviser of course is that once a risk profile has been selected it's a much simpler job to select a fund or model portfolio whose strategic asset allocation meets that profile. That straight-through process from financial and investment planning in the front office through to fund selection is critical as it lowers the cost. Not just for the adviser but also for the fund manager who can then receive instructions electronically - providing scope for fee reduction.
Technology plays a critical role in enabling advice firms to charge fees while reducing costs for the other players in the value chain. Getting costs down to a level where they are acceptable AND delivering a quality service to the customer has got to be a good thing.
While weekend papers run this kind of piece from time to time - it's clear from the prominence of this article, a third of the front page (not just the front page of the money section but of the whole paper) that this really is an issue of the moment.
The argument was as follows; on top of the annual management fee there are a range of administrative expenses which if customers really understood what was going on would be seen in many cases as unacceptable.
In an industry in which advisers are transforming their business models ahead of RDR to charge fees and the value chain from fund provider, product/platform provider and adviser is becoming increasingly transparent, greater price pressure will of course be placed on each.
What advice firms tell us is that something has to give. It can't be the ongoing adviser's fees as advisers in the future will be doing more not less. The platform fee where there is one, is already the smallest component.
The focus now as per Saturday's Telegraph is the costs of fund management.
We are seeing more and more clients and firms adopt a greater proportion of passives within their portfolio. Another route is the use of Exchange Traded Funds. Cost is a major driver for both of these strategies. RDR is likely to accelerate this trend given the requirement for independent advisers to take them into account.
But in a difficult and unpredictable market active managers argue that this is where they add their value; finding the opportunities which trackers cannot.
The difficulty here is that as high quality risk profiling of clients becomes the norm and applications like our own Dynamic Planner® (see this review in The Times) are used to help advisers work with customers to agree how much risk they ought to take on, having fund managers take risks outside of an agreed 'budget' does not work.
Increasingly fund managers have been asking us to classify their funds against our risk profiles given the widespread use of Dynamic Planner risk profiling across the industry.
We launched our Fund Risk Profiling service back in April and the level of interest has been amazing with DFMs, fund managers and providers coming to talk to us. The latest group to sign up last week was Skandia with their Spectrum funds.
The benefit to the customer and adviser of course is that once a risk profile has been selected it's a much simpler job to select a fund or model portfolio whose strategic asset allocation meets that profile. That straight-through process from financial and investment planning in the front office through to fund selection is critical as it lowers the cost. Not just for the adviser but also for the fund manager who can then receive instructions electronically - providing scope for fee reduction.
Technology plays a critical role in enabling advice firms to charge fees while reducing costs for the other players in the value chain. Getting costs down to a level where they are acceptable AND delivering a quality service to the customer has got to be a good thing.
Monday, 2 August 2010
Enriching relationships
Last month, I spoke at Westminster & City’s ‘Implementing the RDR’ conference. From the nature of the other speakers, delegates and Q&A sessions it was clear that financial organisations are now very focused on making the significant transitions required: providers, platforms and advice firms.
I presented our latest adviser productivity research from last month, shortly to be published in a white paper “A problem shared is a problem halved”. In the context of declining initial fees (see Clive Waller’s excellent study), the need for the dramatically enhanced productivity in the front office is an absolute. Many of our clients are now saying; ‘Our people need to work twice as hard to earn the same’. Our view of how to achieve this is through three key strands: 1) greater use of technology in the front office 2) segmentation of the client base and the delivery of an appropriate proposition to each and 3) ‘sharing the problem with the customer’. This was written up by FT Adviser as “Advisers need to board the ‘Easy Jet’ trend”. Much snappier but the essence is right. Easy Jet and many travel companies get the customer to do more of the work before they deliver their service. So must our industry. Email me if you would like the full presentation.
There was a lot of interest from banks on Simplified Advice and on qualification levels in particular. The FSA’s view was that there are a number of advice regimes in existence already (advised, basic advice and non-advised) they do not see the need for another one. Furthermore, they feel there is yet to be convincing evidence that QCAL4 was not required for advisers delivering Simplified Advice on the basis of ‘what is it that is so different from full advice that would mean a lower standard of qualification is required?’ The FSA was clear that in the event that the Financial Ombudsman Service felt that ‘advice’ had been provided it would need to be reviewed in that context. They are open to the industry making the case though.
On this last point, we worked with the ABI & BBA on designing and testing a new Simplified Advice process - Assisted Purchase. It was clear from this research that customers did in fact feel that they had been advised. Peter Smith repeated the FSA’s view that simple processes were in fact allowable under the current regulatory regime and that if the process of delivery of advice was systematized then this represented an opportunity in so far as qualifications clearly don’t apply to systems. Clearly there are opportunities here.
Ben Goss, CEO Distribution Technology
I presented our latest adviser productivity research from last month, shortly to be published in a white paper “A problem shared is a problem halved”. In the context of declining initial fees (see Clive Waller’s excellent study), the need for the dramatically enhanced productivity in the front office is an absolute. Many of our clients are now saying; ‘Our people need to work twice as hard to earn the same’. Our view of how to achieve this is through three key strands: 1) greater use of technology in the front office 2) segmentation of the client base and the delivery of an appropriate proposition to each and 3) ‘sharing the problem with the customer’. This was written up by FT Adviser as “Advisers need to board the ‘Easy Jet’ trend”. Much snappier but the essence is right. Easy Jet and many travel companies get the customer to do more of the work before they deliver their service. So must our industry. Email me if you would like the full presentation.
There was a lot of interest from banks on Simplified Advice and on qualification levels in particular. The FSA’s view was that there are a number of advice regimes in existence already (advised, basic advice and non-advised) they do not see the need for another one. Furthermore, they feel there is yet to be convincing evidence that QCAL4 was not required for advisers delivering Simplified Advice on the basis of ‘what is it that is so different from full advice that would mean a lower standard of qualification is required?’ The FSA was clear that in the event that the Financial Ombudsman Service felt that ‘advice’ had been provided it would need to be reviewed in that context. They are open to the industry making the case though.
On this last point, we worked with the ABI & BBA on designing and testing a new Simplified Advice process - Assisted Purchase. It was clear from this research that customers did in fact feel that they had been advised. Peter Smith repeated the FSA’s view that simple processes were in fact allowable under the current regulatory regime and that if the process of delivery of advice was systematized then this represented an opportunity in so far as qualifications clearly don’t apply to systems. Clearly there are opportunities here.
Ben Goss, CEO Distribution Technology
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