Enabler vs Protector

With industry change well under way, I am seeing two distinct behaviours in the firms that we are working with,  and there is a high level of struggle between them that is proving to be a considerable management challenge.

ENABLERS VS PROTECTORS

‘Enablers’ are ones that are extremely aware of the impact of regulatory change in terms of what this means in terms of the supply chain. I hear lines like ‘servant leadership’, they question really what does ‘client centric’ mean, and they fundamentally are prepared to air their views about they would like to receive as a client of an investment firm. Words like ‘proposition’, ‘service’, ‘value’, ‘trends’, method of engagement are common.

‘Protectors’ are the ones that appear to display the characteristics of seeking to retain much of the current industry model and structure and seem to be trapped in some lines of thought and practice that is perhaps becoming redundant. Words and phrases like ‘product’, ‘distribution’, ‘segment’ are used heavily, often in the context that these things are fixed.

 Are you an ‘enabler’ or a ‘protector’ ?

Continuous, Cost-Effective Compliance IS Possible

The emergence of a stricter, more onerous regulatory environment in a number of OECD countries, namely Australia, the UK, and Singapore to protect investors is excellent for the industry but it comes at a high price.  Or does it?

Certainly, an effective compliance regime (eg one in which client portfolios do not breach their guidelines but allows for imaginative investment latitude within defined boundaries) requires constant vigilance. This kind of attention requires a great deal of thought, reflection, and adjustment - generally performed over many hours by several staff. As a result, monitoring effective compliance can be one of the most significant costs to a wealth management business. 

Now, however, smart, flexible technology can ensure that the entire compliance process can be automated.  Every portfolio in a wealth management business, irrespective of individual and widely-varied compliance requirements can be adjusted simultaneously and in complete conformity. Beginning with the client’s own rules, preferences and constraints, compliance can now be vertically integrated throughout the entire investment process. 

The entire process is automatic and portfolios are monitored on an ongoing basis. The ability to scale portfolio adjustments easily and accurately makes it possible to provide a genuinely tailored investment service for the masses in a low-cost manner.