Good article from Tony Vidler at the link below. As the industry moves from price makers to price takers, it's less about the industry and more about what the consumer thinks of its value..
http://tonyvidler.blogspot.co.uk/2012/07/its-not-about-youits-about-value.html?spref=tw
A blog with related materials and commentary towards increasing consumer influence on the wealth management industry.
Wednesday, July 11, 2012
Friday, July 6, 2012
Is “do it with me” just another catch phrase? Look closer…
'Do It With Me'...Yet another boring catch phrase. Yawn. They just keep coming, don’t they? Boring catch phrases designed as catch alls
for trends that aren’t really new. Or
are they?
The latest I talk about a lot is “Do it with me”. Self
evident, right? ‘Do it with me’, ‘do it
for me’, ‘do it with anyone but me’, what does it all matter?
Why do we have to talk about this at
all? Because we have largely built an
industry model built around a mentality of limiting people’s ability to
exercise their choice. We give them lots
of choices but we LIMIT their ability to exercise choice unless it is in a ring
fenced proposition or even limited choice of providers under a regulation. Many are guilty of wanting to ‘do it for them’,
shoehorn them into a one-size-fits all and not think about them for six months.
Those days are over. Consumers now demand, and receive, bespoke
attention across a range of industries, not least of which is financial
services. They don’t want to sit powerless
on the sidelines. They want to participate in the decisions being made about
their lives.
Should as an industry we don’t engage with
the consumer on a meaningful level, they may just decide to ‘do it themselves’.
In Australia where over $500Bn of superannuation assets are no outside public
offer schemes (and growing at a rate of knots…) there is a clear sign of this.
A nd whilst only 14% of these monies are
advised, 42% of new monies are advised under this model. Has the Australian
market realized that ‘Do It With Me’ is the new retail offer already ?
Quite a lot actually.
Friday, June 8, 2012
Rethinking Active Management
Great articles from Tria at:
http://www.triapartners.com/triapartners-blogs.php?article=content/Blog-Rethinking%20active%20equities%20businesses&type=NDM
http://www.triapartners.com/triapartners-blogs.php?article=content/Blog-Active%20equities:%20how%27s%20your%20marketing%20alpha?&type=NDQ=
About a number of questions concerning the future of active management in investment funds, and how products and marketing of such need to converge.
Ulitmately, I see this as being a real challenge to the concept of the unit trust as a single vehicle for investor portfolios: Not only due to structural imperfections and costs associated with their operations, but also because the drivers for them as sustainable business models are starting to come under considerable pressure.
http://www.triapartners.com/triapartners-blogs.php?article=content/Blog-Rethinking%20active%20equities%20businesses&type=NDM
http://www.triapartners.com/triapartners-blogs.php?article=content/Blog-Active%20equities:%20how%27s%20your%20marketing%20alpha?&type=NDQ=
About a number of questions concerning the future of active management in investment funds, and how products and marketing of such need to converge.
Ulitmately, I see this as being a real challenge to the concept of the unit trust as a single vehicle for investor portfolios: Not only due to structural imperfections and costs associated with their operations, but also because the drivers for them as sustainable business models are starting to come under considerable pressure.
Sustainability in Wealth Management
Interesting article about the need to find a more sustainable way of delivering wealth management value.
http://www.professionalplanner.com.au/private-banking/private-wealth-model-is-challenged/
Clearly change is coming...
http://www.professionalplanner.com.au/private-banking/private-wealth-model-is-challenged/
Clearly change is coming...
Friday, May 25, 2012
The importance of systemised rebalancing
Article in IFAOnline today here about how systemised rebalancing may not be treated as requiring discretionary authorities by advisers. This, I think, provides some insight into regulatory thinking. It also raises quite a few questions, some of these being:
Q) Who defines the rules for sysemised rebalancing? And, what is acceptable?
Q) What happens if the client has made some specific instructions (or combinations of) that the systemised process cannot accomodate?
Q) Is there a set periodicity that can be mandated for rebalancing portfolios? What happens if something important occurs in the middle of that period?
Q) Is a systemised process the key aspect here? Or, is the key aspect how the systemised process is used for clients?
Whilst systemisation is clearly a step forward in removing arbitary decision-making (and perhaps bias), the most important aspect in this discussion is about what is most suitable for the client in the rebalancing process. In other words, there is not a 'one size fits all' here.
I imagine the firms that accomodate client-centric and client-directed rebalancing will pass all tests (regulatory and client satisfaction)!
Q) Who defines the rules for sysemised rebalancing? And, what is acceptable?
Q) What happens if the client has made some specific instructions (or combinations of) that the systemised process cannot accomodate?
Q) Is there a set periodicity that can be mandated for rebalancing portfolios? What happens if something important occurs in the middle of that period?
Q) Is a systemised process the key aspect here? Or, is the key aspect how the systemised process is used for clients?
Whilst systemisation is clearly a step forward in removing arbitary decision-making (and perhaps bias), the most important aspect in this discussion is about what is most suitable for the client in the rebalancing process. In other words, there is not a 'one size fits all' here.
I imagine the firms that accomodate client-centric and client-directed rebalancing will pass all tests (regulatory and client satisfaction)!
Friday, May 4, 2012
Centralised or Decentralised Investment Propositions
Much talk over here at the moment in the UK about centralised investment propositions. In short, this appears to be about operating a centralised process of investment management for a broad range of clients: these are most often segmented in a sensible manner allowing for risk tolerance and investment timeframe.
However, running contrary to this view, there is much talk also about the need to have client-specific investment propositions that are tailored to each client. Indeed, there is an emerging school of thought that it may not be good practice to just move clients into a centralised investment proposition.
Mmmm. I sense an issue here.
Perhaps there is an answer in between that addresses both views:
The devil is in the detail here, but with the right technologies and processes, why can't the industry have the best of what initially may appear to be conflicting directives?
However, running contrary to this view, there is much talk also about the need to have client-specific investment propositions that are tailored to each client. Indeed, there is an emerging school of thought that it may not be good practice to just move clients into a centralised investment proposition.
Mmmm. I sense an issue here.
Perhaps there is an answer in between that addresses both views:
- Centralise the common aspects of a centralised investment proposition such as investment research or model portfolios, centralise the technology servers to help advisers make decisions, centralise the data feeds to provide portfolio context; and
- De-centralise the use of the technology, and the client-specific directives into the implementation process so that whomever is dealing with the end investing client can ensure that the common philosophy and process are implemented according to the client's situation
The devil is in the detail here, but with the right technologies and processes, why can't the industry have the best of what initially may appear to be conflicting directives?
The Importance of Emotion
I am reading this great book 'Firms of Endearment' (which you can buy on Amazon). I strongly suggest anyone who is supporting a consumer business should read this book. Whilst I am only a little way through so far, one of the points the book makes is about the importance of arousing emotions in dealing with consumers.
'A brand or company that fails to arouse a consumer's emotion in positive ways will not have consumer's loyalty. And the same holds true for employees'....
So, what has this to do with retail investing and the wealth management industry? Quite a lot I think.
Firstly, that interaction with consumers and retaining loyalty (in order to retain and grow revenue streams) means more providing content in the context of each consumer to arouse emotions. Those propositions that are too blunt and just about the product, instead of about the client, are likely to suffer. To really be about the client, it means it has to be about their investment portfolio, their situation, and their performance.
Secondly, unless a firm is passionate about what it does in the context of the consumer, it may struggle to retain talent also. Firms moving from an absolute culture to a client culture are more likely to attract and retain the best, motivated people.
'A brand or company that fails to arouse a consumer's emotion in positive ways will not have consumer's loyalty. And the same holds true for employees'....
So, what has this to do with retail investing and the wealth management industry? Quite a lot I think.
Firstly, that interaction with consumers and retaining loyalty (in order to retain and grow revenue streams) means more providing content in the context of each consumer to arouse emotions. Those propositions that are too blunt and just about the product, instead of about the client, are likely to suffer. To really be about the client, it means it has to be about their investment portfolio, their situation, and their performance.
Secondly, unless a firm is passionate about what it does in the context of the consumer, it may struggle to retain talent also. Firms moving from an absolute culture to a client culture are more likely to attract and retain the best, motivated people.
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