Tacking the challenges facing the wealth management industry Visit us at Stand A520
A large and growing HNW opportunity Assets >$1 million 2010E: $40.1 trillion assets North America $14.2T Assets 3.3M Individuals Europe $11.8T Assets 3M Individuals Latin America $1.8T Assets.1M Individuals ME-A $2.5T Assets.7M Individuals A-PAC $9.8T Assets 3.6M Individuals Sources: Scorpio Partnership Estimate Booz & Co. After the Perfect Storm s Based on regional share of global wealth remaining constant from 2008 2
But an industry in transition Core Drivers of Wealth Management Geared for Growth Demographic factors Entrepreneurship Concentration of wealth Revenue is Cyclical Tied to equity market Highly resilient Profitable even in difficult times Change Levers Market Environment Shift in distribution Regulatory Transparency Risk management End of taxed induced offshore model Client Behavior More pragmatism Regaining trust? Operation Model Pressure on costs will endure Local/Global l New business models will emerge- but do we understand the client? 3
Understanding the clients Two topics: Credibility and Transparency Relevance and Client Centricity Two sources: The Future of Wealth Report www.futurewealthlab.com SEI Topic of Interest Research www.seic.com com Visit us at Stand A520 4
How serious is the credibility gap? WOULD YOU USE AN ADVISER TO HELP MAKE FINANCIAL DECISIONS? 34% 34% 32% 23% 20% 17% 10% Yes No 66% 66% 68% 77% 80% 83% 90% Wealth managers often talk about the trust deficit, it but trust t means many different things North America Middle East & Africa Asia Indian Subcontinent UK Continental Europe CEE Perhaps it is better to think in terms of credibility and relevance Source: The Future Wealth Report 2009 5
Credibility. and transparency In the wake of the financial crisis, wealth advisers started simplifying products and fees in a bid to show transparency But clients are not necessarily looking for simpler products from a wealth adviser After all, they are paying for professional money management The recession has been interesting because it begs the question: do we trust the financial sector for its knowledge? - a 30-year-old entrepreneur What they are looking for is an open dialogue about their choices Source: SEI research with 50 UK wealth advisers and private clients 6
Transparency heat map HOW CAN A WEALTH ADVISER DEMONSTRATE TRANSPARENCY? Client perspective Reporting Knowledge transfer Industry perspective Reporting Knowledge transfer I just want easily accessible information about what is going on in the portfolio presented how I like it. - a 45 year-old business owner Product selection Product selection Fees Fees Low importance High importance Source: SEI research with 50 UK wealth advisers and private clients 7
Relevance and client centricity WHO IS MOST LIKELY TO HELP YOU ACHIEVE YOUR WEALTH GOALS? (TOP 3) 51% 70% 74% 76% We all value the judgement of those closest to us. 49% 30% 26% 24% 87% 90% 90% 94% 95% But why do private clients rely on family and dfi friends to help them achieve their wealth goals? 13% 10% 10% 6% 5% Fam mily member Friend No-one Finan ncial adviser Other vate banker Pri Accountant nk manager Ba Lawyer NO YES Source: The Future Wealth Report 2009 8
Relevance and client centricity Clients want a wealth adviser who can demonstrate their best interests are at heart In simple terms, this means have a process for analysing client needs And drawing on the expertise of their organisation to deliver appropriate, flexible and innovative solutions I want them to look at my situation ti forensically, rather than saying: what solution can I provide? - a 50-year-old PLC director Source: SEI research with 50 UK wealth advisers and private clients 9
Walking in the client s shoes HOW CAN WEALTH ADVISERS DEMONSTRATE CLIENT-CENTRICITY? Understanding client needs Implementing solutions A team-based b d approach Analysing the client s needs Original investment thinking There should be a centralised strategy with the objective of having a deep and meaningful conversation with the client. - a 40-year-old executive An adviser who listens to me Flexibility to react to the client s circumstances Source: SEI research with 50 UK wealth advisers and private clients 10
Business fundamentals Put simply, the wealth management industry must focus on its business fundamentals Delivering the right solution To the right client At the right cost To the satisfaction of the regulator This requires a far better understanding of client needs than the industry has achieved to date The opportunity to grow is significant 11
SEI: Who We Are Visit us at Stand A520 Successful, Financially Sound Firm Founded in 1968, publicly listed (SEIC), closely held 2,000+ employees in 12 countries Revenue 700m, Net Income before taxes 150m Cash and Short Term Investments of 330m and no directly issued debt Innovative Market Leader Significant investment in new global wealth processing infrastructure Leading institutional manager of managers Pioneer of wealth management processing and asset allocation strategy Empowering Client Success Over 6,500 adviser, 125 banks & 1,500 institutional relationships globally Process over 1.4 million end-client accounts 110bn Assets under Management 270bn Assets under Administration As at 31 Dec 2009 12
Key Differences In Our Approach Integrated platform, end to end Comprehensive client reporting capabilities Target Wealth Management Market Requisite balance sheet track record and long term partner commitment Resource and Capital Deployment Strong STP solution for rebalancing, dealing, settlement and custody Scalable, robust platform to support long term growth 13
Our proposition supports the needs of our clients Grow Revenue Institutionalize the client experience Understand the total client relationship Offer a broader set of solutions Support merger and acquisitions Reduce Cost Optimize and automate fragmented business processes Create operational scale and efficiencies Focus on client facing activities Manage Risk Support long term client relationships Ensure regulatory compliance Mitigate operational risks Provide transparency Differentiate Offering Provide a personalized client experience Integrate manufactured and non-manufactured products Target multiple market segments SEI Investor Presentation 16 June 2010 14
Global Wealth Services Solution Outsourced Infrastructure Comprehensive integrated platform Enterprise database Models based investing Relationship architecture Global and complex transactions Scalable infrastructure 24/7 worldwide operations Transformation Business discovery Change management Conversion expertise Staff augmentation M&A support Client Portfolio Management Goals-based portfolios Manager of managers UMA/UMH Risk Management Independent managers Open Architecture SEI Investor Presentation 16 June 2010 15
Global Wealth Services End Users 3 rd Parties Regulators Broker Custodian End Client Website Firm Advisor Firm or 3 rd Party Investment Manager Transfer Agents Fund Managers Investment manager Cash Agent Integration File Based XML Crest Euroclear SWIFT FIX Payments BACS CHAPS Cheques Business Services Asset Transfer Implementation Hedge Assistance Funds Fund Admin. Core Client Processing Services Client & Account Administration Document Management ISA Administration Fund Agreements Portfolio Mgt Strategies Rebalancing 3 rd Party DFM Order Management Dealing Investment Compliance Fees & Commissions Cash Services Custody Settlement Corp Actions Asset Data Management Reconciliation Firm Reporting Client Reporting Statements Contract notes Performance Advices Tax Processing & Reporting Regulatory Reporting Data Pricing Risk Ratings Fund Facts & KFD Builder Indices Held Away Assets Assets Supported Funds Alternatives Account Types/Wraps SIPP ISA Equities Fixed income Cash ETFs Structured Prods GIA SSAS Off-shore Bond Personal Pension 16
SEI Responsibilities Corporate Actions/Income Processing Data Collection from Custodian Set Up Election Management (Corp Actions) Custodian Instructions Execution to End Clients Dealing Service (Collectives, es, ETF, Equities, Fixed Income and Alternatives) Routing of Trades to Market using an embedded OMS Trade Aggregation (as appropriate) Settlements Trade Matching Exceptions Management Rebooking services Reconciliations i Cash and Stock reconciliations across multiple custodians Asset Data Management Asset Creation Pricing Fund Agreements, Fees and Commissions Administration of your fee packages Collection and processing of fees and commissions Invoicing and allocating fee rebates Potential use of SEI Fund Agreements Client Reporting (production and distribution) Statements/Valuations Contract Notes Performance/Benchmarks Tax Packs (Capital Gains and Income, Consolidated Tax Certificate) Other Services Asset Transfers ISA Administration Cash and Payments 17
SEI Investment Processing Experience Long History of Investment Processing 1970s automated trust accounting system 1980s application hosting 1990s operations outsourcing 2000s global wealth services (GWS) Global, Scalable Operation Headcount 516 (182 middle office, 334 back office) Custody of over $300 billion of which approximately $143 billion is mutual funds 222,000 securities (Equity Fixed and Non-Marketable) and 1,900,000+ fund positions 7,000,000+ 000+ income transactions/year 1,000,000+ corporate actions/year 2,700,000+ disbursements/year 2,400,000+ aggregate trades/year Over 5,100,000+ 000+ statements t t and performance reports/year Trade in 27 currencies on 50 exchanges Source SEI Private Trust Company 18
Important Information This information is issued by SEI Investments (Europe) Limited, 4th Floor, Time & Life Building, 1 Bruton Street, London W1J 6TL which is authorised and regulated by the Financial Services Authority. No offer of any security is made hereby. Recipients of this information who intend to apply for shares in any SEI Fund are reminded that any such application may be made solely on the basis of the information contained in the current prospectus for the relevant fund. You are reminded that the value of an investment and the income from it may fall as well as rise, and if the investment is withdrawn in the early years, it may not return the full amount invested. Past performance is not a guarantee of future performance. Investment in a SEI Fund is intended as a long-term investment. If a fund is selected which holds overseas investments, it should be noted that exchange rate fluctuations could affect both the level of income received and the value of the investment. 19