TRENDS IN WEALTH MANAGEMENT: The Need for Technology Adoption

Transcription

1 FINANCIAL SERVICES PRACTICE CEB TowerGroup Wealth Management SIGNiX Webinar August 31, 2015 TRENDS IN WEALTH MANAGEMENT: The Need for Technology Adoption

2 TOP WEALTH MANAGEMENT THEMES ENHANCE AND ALIGN A HOLISTIC ADVICE MODEL BASED ON CLIENT SEGMENT DELIVER A CONTINUOUS, MULTI-CHANNEL ADVISORY EXPERIENCE DRIVE AN ARCHITECTURAL STRATEGY TO REDUCE REDUNDANCY AND DRIVE INTEGRATION REDUCE ADVISOR AND CLIENT EFFORT IN SALES AND SERVICE PROCESSES 2015 CEB. All Rights Reserved. 2

3 While wealth executives are focused on sales as a top priority, building a new advisory model is a key way of supporting this overall goal. A NEW ADVISORY MODEL CENTERED ON GOALS Percentage of Respondents Selecting Each Priority as Highly or Critically Important Given your company s business strategy, how important 1 are each of the following issues to your company during the next 6 to 12 months? Sales and Advisory Strategy Delivering a Consistent Sales Experience Across the Frontline 78% Bridging Organizational Gaps to Drive Referrals 72% Implementing Goal-Based Planning and Investing Strategies 71% Motivating Clients to Act on Advisory Recommendations 61% Improving Sales Processes to Reduce the Sales Cycle Length 56% n = 139 Source: CEB Wealth Management Leadership Council 2015 Outlook Poll 1 Respondents ranked Importance on a 5-point scale (5 = Critical Importance and 1 = Low Importance) The graph shows the percentage of respondents who selected importance of that issue as 4 or 5 on the scale CEB. All Rights Reserved. 3

4 FINANCIAL PLANNING COMMON ACROSS AGES AND ASSETS Although retired and boomer clients still receive the most comprehensive guidance, even younger clients are demanding broader, if not holistic, 38% 37% guidance from their advisors. 29% 26% Extent of Personal Financial Guidance Clients Receive from Their Primary Advisor, by Age Respondents with at Least US$500,000 in Investable Assets, Global, % 37% 41% 47% 11% Gen Y/X Boomer/Retiree Retiree I Receive Guidance on My Entire Financial Situation I Receive Guidance on a Few Areas of My Financial Situation I Receive Guidance on One Specific Aspect of My Finances n = 600 Source: CEB 2013 Customer Experience Survey Note: Totals may not equal 100% due to rounding. Asset Threshold to Create Complex Financial Plans Percentage of Respondents by Firm, % $10M 17% No Asset Threshold 13% Less than $1M 30% $5M n = 23 Source: CEB Forum Polling, CEB. All Rights Reserved. 4 26% $1M

5 BUT CURRENT TECH NOT MEETING THESE NEEDS A majority of advisors are dissatisfied with the tools and technology supporting advice. Executive Assessment of Advisors Level of Satisfaction With Advisory Tools and Technology Global, 2014 Not Satisfied With Tools and Technology Provided 72% 28% Satisfied With Tools and Technology Provided N = 44 Source: CEB 2014 Advisory Experience Diagnostic Firm Resource Effectiveness for Advisors Percentage of Executives Indicating Resource is Effective or Very Effective, % Senior Executives Market Managers 11% 11% 13% 13% 10% Tools and Templates Provided to Client-Facing Technology to Support Advice Delivery Enhance the Advisory Experience N = 44 Source: CEB 2014 Advisory Experience Diagnostic. Technology to Make It Easy for Advisors to Execute a Defined Advisory Process 2015 CEB. All Rights Reserved. 5

6 Holistic planning shifts from a linear or episodic process to a continuous, dynamic lifecycle. WEALTH TECHNOLOGY NEEDS TO SUPPORT THE 4-STEP CYCLE Process Elements of Goal-Based Investing Discover Goals Technology Maturity Demonstrate Value Technology Maturity Create the Plan Technology Maturity Source: CEB analysis. Technology Maturity Execute the Plan 2015 CEB. All Rights Reserved. 6

7 TOP WEALTH MANAGEMENT THEMES ENHANCE AND ALIGN A HOLISTIC ADVICE MODEL BASED ON CLIENT SEGMENT DELIVER A CONTINUOUS, MULTI-CHANNEL ADVISORY EXPERIENCE DRIVE AN ARCHITECTURAL STRATEGY TO REDUCE REDUNDANCY AND DRIVE INTEGRATION REDUCE ADVISOR AND CLIENT EFFORT IN SALES AND SERVICE PROCESSES 2015 CEB. All Rights Reserved. 7

8 Consumer technology usage is high, but many advisors are not interacting with their clients in a digital manner. MOVING DIGITAL ENGAGEMENT TO ADVISOR INTERACTIONS In The Last 12 Months, Has Your Primary Wealth Manager Presented Information To You On A Computer Instead Of Paper During An In-Person Meeting? Percentage of Respondents, % 47% 13% 20% 2% 2% 16% 25% 4% 5% Yes, my advisor presented information to me on a laptop computer Yes, my advisor presented information to me on a tablet computer Yes, my advisor presented information to me using a desktop n = 299 Source: CEB TowerGroup Wealth Management Client Experience Survey, No, my advisor did not present information to me on a computer Unsure HNW Clients Evaluation of Advisor Technology Use During In-Person Meeting Percentage of Respondents Whose Advisors Used Technology to Present Information, North America, % Good 2% Unsure 28% Excellent 8% Fair 36% Very Good n = 420 Source: CEB TowerGroup Wealth Management Client Experience Survey, CEB. All Rights Reserved. 8

9 A collaborative, multichannel experience that takes into account varied client preferences will increase firm loyalty. FIRMS NEED A CONTINUOUS EXPERIENCE ACROSS CHANNELS TO DRIVE LOYALTY Clients Who Would Stay With Their Firm if Their Advisor Left By Frequency Which They Visit the Firm Website, 2011 Once a Week to Daily 56% Monthly to About Weekly 51% Once to Every Couple of Months 47% Never Use the Website 40% HNW Clients Preferred Method of Trading Stocks, Bonds, and Other Investments Held at Their Primary Wealth Management Firm Percentage of Respondents, 2013 Mail 1% Unsure 12% Mobile Device 2% Phone 21% Client Portal 32% In Person 31% 2015 CEB. All Rights Reserved. n = 1050 (United States & United Kingdom); 139 (United States) Source: CEB TowerGroup High Net Worth Client Experience Survey,

10 The percentage of prospects that expect to hear from their advisor more than 6 times a year has decreased.. TECHNOLOGY WILL FACILITATE SHIFT IN FREQUENCY OF IN-PERSON INTERACTIONS Desired Frequency of Communication With Advisor (phone, personalized , inperson) for Prospective Clients Percentage of respondents, 2011 and % 34% 28% 30% Δ 5% % 15% 9% 6% 6% 7% 1.0% 0.3% 2% 0.2% >Weekly About weekly About monthly 3 to 5 times 2 times 1 time Not at all 2015 CEB. All Rights Reserved. n = 1050 (United States & United Kingdom); 260 (United States) Source: 2011 and 2013 Client Experience Surveys, CEB TowerGroup Research 10

11 MOVING TOWARD COMPLETE CLIENT COVERAGE Forward thinking firms are combining both client facing and back office technology to support multiple client and advisor segments. Illustrative Example Access Portal Investment Review Flow Client Self Directed Client Works with Advisor Access Portal Financial Planning Software Various Financial planning output types Client Review Client Works with Planning Team Investment Fulfillment Flow 2015 CEB. All Rights Reserved. 11

12 TOP WEALTH MANAGEMENT THEMES ENHANCE AND ALIGN A HOLISTIC ADVICE MODEL BASED ON CLIENT SEGMENT DELIVER A CONTINUOUS, MULTI-CHANNEL ADVISORY EXPERIENCE DRIVE AN ARCHITECTURAL STRATEGY TO REDUCE REDUNDANCY AND DRIVE INTEGRATION REDUCE ADVISOR AND CLIENT EFFORT IN SALES AND SERVICE PROCESSES 2015 CEB. All Rights Reserved. 12

13 Wealth firms struggle with separate front office systems across client segments, with advisors using a variety of different systems for the same purposes. DUPLICATIVE TECHNOLOGY FOR DIFFERENT CLIENT SEGMENTS Siloed Front Office Tech Across Wealth Firms Advisor Advisor Advisor Client Portal Advisor Desktop Client Reporting Financial Planning Portfolio Management Client Portal Advisor Desktop Client Reporting Account Aggregation Financial Planning Portfolio Management Advisor Desktop Client Reporting Account Aggregation Financial Planning Portfolio Management Mass Market/Mass Affluent Segment HNW Segment UHNW Segment Source: CEB Analysis 2015 CEB. All Rights Reserved. 13

14 BACK OFFICE PLATFORMS TIED TO PRODUCTS Typically, each product offering is supported by its own back office platform, making it difficult to integrate data feeds and maintain consistency. Siloed Product to Back-Office Setup Mutual Funds Managed Accounts Trust Services Brokerage Offerings Mutual Fund Shareholder Recordkeeping Managed Account Platform Trust Accounting Securities Processing Client Demographics Client Demographics Client Demographics Client Demographics Holdings Holdings Holdings Holdings Transactions Transactions Transactions Transactions Source: CEB Analysis 2015 CEB. All Rights Reserved. 14

15 CUSTOMERS DON T CARE ABOUT THE PLUMBING By integrating front office channels into a single platform, wealth firms will be able to increase efficiency and offer uniform service. Architecture of an Integrated Core Systems Suite Illustrative Example Front End Advisor Tablets Smartphones Client Portal Web Apps Desktop Contact Centers Mass Market UHNW Records Systems Retirement Records Mutual Funds Managed Accounts Integrated Wealth Platform Trust Accounting Securities Processing Portfolio Management Source: CEB analysis CEB. All Rights Reserved. 15

16 BETTER CUSTOMER SERVICE AND MORE REFERRALS One financial services provider that integrated its front and back office system architecture saw significant customer service and cross-sell expansions, boosting referral scores and sales. Reduction In Systems Needed to Handle Average Service Interaction Financial Services Provider, Source: CEB Case Study Pre-Integration Post-Integration Additional Improvements on Metrics Post-System Integration Financial Services Provider, 2013 Across 48 million interactions and 140 million transactions Shorter hold times Improved call resolution rates Reduction in follow-up calls Higher overall referral scores Source: CEB Case Study 2015 CEB. All Rights Reserved. 16

17 TOP WEALTH MANAGEMENT THEMES ENHANCE AND ALIGN A HOLISTIC ADVICE MODEL BASED ON CLIENT SEGMENT DELIVER A CONTINUOUS, MULTI-CHANNEL ADVISORY EXPERIENCE DRIVE AN ARCHITECTURAL STRATEGY TO REDUCE REDUNDANCY AND DRIVE INTEGRATION REDUCE ADVISOR AND CLIENT EFFORT IN SALES AND SERVICE PROCESSES 2015 CEB. All Rights Reserved. 17

18 HIGH EFFORT INTERACTIONS CAUSE DISLOYALTY High effort, regardless of the final outcome of the interaction, is highly correlated with disloyalty. Disloyalty of Customers Reporting High Versus Low Effort Willingness to Switch Service Provider Based on Experience, % 87% 9% Low-Effort Experience High-Effort Experience n = 54,166 customers; tested more than 100 variables Source: CEB Customer Contact Council 2015 CEB. All Rights Reserved. 18

19 Half of wealth executives are concerned about the high level of effort clients must put forth to participate in a holistic advisory model. HIGH LEVEL OF CLIENT EFFORT IMPEDES DELIVERY OF HOLISTIC ADVICE Firm s Biggest Challenge Regarding Clients Percentage of Respondents, % 33% 17% 0% 0% Client belief that the goals-based process is not valuable High level of client effort to participate in the goals-based planning process Ability for client to monitor the plan Client concern for data protection Other n = 12 Source: CEB TowerGroup Wealth Management November 2014 Executive Roundtable Survey CEB. All Rights Reserved. 19

20 Making the experience easier for clients drives initial engagement and long-term loyalty. EFFORT REDUCTION FOCUSED ON ONBOARDING AND CHANNEL ACCESS IN 2015 What are the TOP TWO areas that are most CRITICAL during the next 12 months Percentage of Respondents, Only Answers Which Were Selected Included, 2014 Preparing systems for upcoming regulatory deadlines 36% Improving client onboarding from front to back office Applying technology to improve multi-channel (portal, mobile, branch, etc.) client engagement 32% 32% Making goals-based planning and reporting the center of your value proposition Integrating core advisor desktop components to increase advisor productivity Assessing/defining strategies for core platform (trust, brokerage, etc.) conversion 18% 21% 25% Organizing data for actionable business analytics 14% Aggregating client data from inside and outside your institution 11% Developing/enhancing the vendor oversight process 7% Developing a mobile technology solution/platform for advisors 4% n = 28 Source: CEB TowerGroup Wealth Management Agenda Poll CEB. All Rights Reserved. 20

21 LAGGING ON DIGITIZATION AND AUTOMATION Most firms fail to effectively modernize their processes and information flow, resulting in a high effort experience that endangers loyalty. Digitization and Automation by Activity, 2013 Digitization Information Flow Processing 32% 36% 45% 52% 54% 46% Incoming Digitial Incoming Paper Volume Volume Digitized Incoming Data Automically Routed to System or User Queue n = 44 Note: Totals may not equal 100% due to rounding. Source: CEB FS Operations Leadership Council Automation Survey, 2012 Data Automically Transferred Between Systems as Needed Automated Decisioning Automated Processing Activity More than 90% 61% to 90% 31% to 60% 0% to 30% 2015 CEB. All Rights Reserved. 21

22 Select Technology Initiatives and Drivers ENHANCE AND ALIGN A HOLISTIC ADVICE MODEL BASED ON CLIENT SEGMENT DELIVER A CONTINUOUS, MULTI-CHANNEL ADVISORY EXPERIENCE Apply financial planning solutions as the centerpiece of goal-based advice with planning capabilities differentiated by client segment. Apply different account aggregation methods to inform the advisory lifecycle. Optimize advisor desktops to support holistic planning and portfolio management through multi-channel collaboration. Enhance the client portal to compete against offerings with personal, online support and better usability. Revamp content management capabilities to simplify digital and face-to-face engagement Top 10 Technology Initiatives for Wealth Management Upgrade client reporting to improve personalized investment performance and add performance relative to goals. Increase the use of automation tools in clientfacing workflows. Drive core recordkeeping initiatives toward integrated platforms that span across client segments and investment products. Maximize data by using actionable analytics to benefit advisors and clients more directly. Continue driving organizational and technological enhancements toward accessing better customer data. DRIVE AN ARCHITECTURAL STRATEGY TO REDUCE REDUNDANCY AND DRIVE INTEGRATION REDUCE ADVISOR AND CLIENT EFFORT IN SALES AND SERVICE PROCESSES CEB. All rights reserved.

23 Self-service tools and online advisory services put consumers in direct control of achieving their financial goals with minimal advisor input. PORTAL COMPETITION FROM NON-TRADITIONAL THREATS Threat Posed by "Robo-Advisors Over Next Five Years Percentage of Respondents, % Very concerned to somewhat concerned that robo-advisors will negatively impacting business 14% Not concerned at all that robo-advisors will negatively impacting business 28% Slightly concerned that robo-advisors will negatively impacting business n = 22 Source: CEB Wealth Management Forum Polling, CEB. All Rights Reserved. 23

24 FIRMS ARE TARGETING ECM AND BPM IN 2015 Firms are looking to BPM and ECM to get a better handle on the processes and workflows that contribute advisor and firm efficiency, but also uncovering unanswered questions, such as how to approach signature capture, workflow, and storage for electronic or digital signatures. What are your TOP THREE areas of technology investment during the next 12 months? Top 5 Responses by Percentage, 2014 CRM Portfolio Management/ Managed Accounts BPM & ECM Financial Planning Advisor Desktop Source: CEB Wealth Management Technology Outlook Poll 2015 Method of signature capture Workflow capabilities ECM+BPM+E-Sig = Front-to-Back Automation Signature storage and access 2015 CEB. All Rights Reserved. Source: CEB Analysis Solution that meets needs of your wealth management firm 24

25 HIGH PRIORITY ITEMS LACK CONFIDENCE Executives realize that analytics and onboarding are important projects, but do not have confidence in their ability to implement. Priority Versus Confidence Scores Somewhat/Very Important and Somewhat/Very Confident Responses, % 60% 50% 40% 30% 20% 10% Assessing/defining strategies for core platform conversion Enhancing social media compliance, engagement, and adoption Developing/enhancing the vendor oversight process Adopting cloud technology and solutions Integrating core advisor desktop components to increase advisor productivity Developing a mobile technology solution/ platform for advisors Making goals-based planning and reporting the center of your value proposition Applying technology to improve multi-channel (client engagement Aggregating client data from inside and outside your institution Preparing systems for upcoming regulatory deadlines Improving client onboarding from front to back office Organizing data for actionable business analytics 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 1 Respondents gave an answer of Very Important or Somewhat Important to the question: In the Next 12 Months, On a 1-5 Scale, With 5 Being the Most Important and 1 Being Least Important, How Would You Rank the Importance of the Following? 2 Respondents Gave an answer of 5 Most Confident or 4 to the question: In the next 12 months, on a 1-5 scale, with 5 being most confident and 1 being least confident, how would you rank your confidence level in executing against the following goals? n = 28 Source: CEB Wealth Management Technology Outlook Poll CEB. All Rights Reserved. 25

26 The most-selected barrier to e-signature deployment is the prioritization of other initiatives over digital signature technology. WITHIN THE WEALTH FIRM, OTHER PRIORITIES SUPERSEDE E-SIGNATURE Barriers to E-Signature Implementation that Most Impact Wealth Firm Plans Respondents Could Select Two, Percentage of Responses, % 29% 14% 7% 7% 7% Other priorities take precedence Other Difficult to make the business case Security Compliance pushback Perceived la client intere demand 2014 CEB. All Rights Reserved. N = 10 Source: October 2013 Technology Executive Roundtable Survey, CEB analysis. 26

27 EXCELLENT ONBOARDING HELPS REFERRALS Clients with favorable ratings of initial interactions are more likely to recommend their firm to others. New Clients* Who Recommended Their Firm, by Rating of Initial Interactions Past 12 Months, April % 48% Sample Average, 53% 33% Fair to Good Very Good Excellent N = 132 Source: CEB 2011 High-Net Worth Client Experience Survey. * New Clients are defined as those with three years or less of advisor and firm tenure CEB. All Rights Reserved CEB. All Rights Reserved. 5

28 WHY USE E-SIGNATURES? Clear Benefits for Clients, Advisors and Firms Faster Onboarding Sign online, anywhere, anytime = improved customer experience Eliminate NIGO Documents Clients & advisors can t finish signing without filling mandatory fields. Legal Compliance / Evidence SEC/FINRA-compliant signatures produce legally defensible proof of signing CEB. All Rights Reserved.

29 INDEPENDENCE FROM PAPER = STREAMLINED PROCESS PROBLEM: Burdensome onboarding process SOLUTION: Integrated signing, eliminating NIGO Built-in online signatures as part of the client onboarding process Security and compliance are two driving concerns for our clients, and SIGNiX put those concerns to rest [with an] easy- to- use service Why Choose? Independent E-Signatures Legal Evidence API Flexibility Easy-to-Use Financial Services Onboarding / Applications Integration 2014 CEB. All Rights Reserved.

30 MAKING YOUR SIGNATURES COUNT PAPER DEPENDENT E-SIGNATURES INDEPENDENT E-SIGNATURES OTHER E-SIGNATURE SERVICE Independently verifiable, embedded signatures in wet ink. Lightweight Audit Trail OTHER E-SIGNATURE SERVICE Signing process inside black box. Image of signatures linked to vendor website. Subject to future link rot. TotalAudit Independently verifiable, transparent signatures & process in digital form. Futureproof CEB. All Rights Reserved.

31 LEGAL ACCEPTANCE Secure Electronic Signature PIPEDA & SOR/ Advanced Electronic Signature EU Signature Directive, eidas, & PAdES Valid Worldwide Exceeds ESIGN & UETA, SEC/FINRA Reliable Electronic Signature Electronic Signature Law of China International Standards Recognized Technology Advanced Electronic Signature UN Model Law on Electronic Commerce & Transactions Independent Verification 2014 CEB. All Rights Reserved.

32 SIGNiXDigitalSignatures CONTACT US We re headquartered in charming Chattanooga, Tennessee a.k.a. DigitallySigned Address 1110 Market Street, Suite 402 Chattanooga, TN Phone Pem Guerry 2014 CEB. All Rights Reserved.

33 Questions?