What is proposition enablement and why do we need it ?

Quite a few people are asking me about proposition enablement. What is it and why do we need it ?

 

Well the answer really lies in the answer to the questions: 'what do you do and why should you be paid for it ?', and the fact that many wealth management industries around the world are going to undergoe a massive change of consumer and participant behaviour brought on by pricing and fee transparency, not to mention the fact that millions of consumers will now start comparting fees and charges alongside the value they are receiving. Which begs the question, 'what is the value that I am receiving ?' and this comes back to propositions.

 

The point being that moving forward the wealth management industry is going to have to be a lot sharper about articulating what it is doing for investors, not in generic terms, beut specifically what are the decisions and actions that are being taken, what is the consumer benchmark for valuing this type of activity, and how will consumers compare and contrast providers of such. I suspect that it is going to get quite competitive out there as the consumer disects the overall propositions from wealth managers and wealth management web sites and start to string their own permutations of such to get the overall experience that they are seeking. The modern consumers pay for what they value, and do the rest themselves.

 

Now we live in very uncertain times when it comes to consumer experiences. Almost daily there are new propositions and related experiences coming out, and in wealth management this is no different. I alone am working with dozens of firms who are reinventing themselves and their proposition for 2013 recognising that consumer behaviour will be different. They are in essence placing informed bets as to what their customers will pay for. Some will win and grow, some may be tested and rework to adjust.

 

So what has this to do with 'proposition enablement'. Well most of these propositions are the offering of portfolio related products or services, in various forms, styles, philosophies etc, and it makes no sense that each proposition to develop out a full range of systems to support such. In the same way that an operating system on a computer provides a set of standardised components to get access to the computers resources (ie disk space, memory, screen, keyboard etc) in order to save appication developers considerable time, those who are putting 'propositions' together will want the same form of prepackaged componentary to help them put their proposition together. This is what we call 'proposition enablement'.  Financial Simplicity is essentially providing a portfolio based 'operating system' for rapidly enabling the development of portfolio propositions for investors.

 

 

 

 

 

Merton: the individual plan man

Check this article out at:

http://www.iandtnews.com.au/people/merton-the-individual-plan-man

Merton is clearly getting up to speed with Financial Simplicity.

A new era of Coaching

Had great discussion with our CTO today who attended the recent Gartner IT and Architecture Conference in Sydney this week. One of the key points was the changing role of 'IT Departments' in a world where staff bring their own IT (in for the form of tablets and phones etc to work) to work. The view was that IT Departments in organisations are moving from a 'Command and Control' position dictating policies and tightly locking down IT infrastructure to one of becoming 'coaches' on how customer facing people use technology to achieve their commercial objectives.

We are already seeing this where wealth managers inside larger organisations are just totally frustrated with the slow pace of change of in house vendor selection and implementation (which was quick compared to in house builds...) and are using or seeking to use more sophisticated capabilities (such as Financial Simplicity) on the web. They are not doing this for fun, they are doing this so they can compete better for investor customers, deal with them in a better way and at lower risk to the firm, and remain relevant and profitable.

At Financial Simplicity, we are taking this to a whole new level where internally we regard our team as a team of coaches who all add value to areas of our clients' businesses, essentially coaching them, and that includes coaching IT Departments to help coach their stakeholders also.

Some questions for contemplation:

- who are you coaching ?
- who should you be coaching ?
- who is coaching the people you should be coaching ?
- what infrastructure do you need in place to leverage your coaching skills ?

SELF-SERVICE CONSUMERS TO DRIVE IT SPEND

Reading the latest on-line edition of I&T News, I was struck yet again by the growing strength of the consumer-driven evolution reshaping the financial services industry each hour.  

In just four years' time across the Asia Pacific region, financial services businesses concentrating on the high net worth sector are anticipated to spend $150 million on technology.  The article, SELF-SERVICE CONSUMERS TO DRIVE IT SPEND, and its supporting research, are well worth reading and reflection.  

The challenge of change is well and truly upon us.   Those who will thrive will be working with a truly collaborative infrastucture - one that listens to, and then enables, the clients' changing views. 

http://www.iandtnews.com.au/news/self-service-consumers-to-drive-it-spend

It's not about you, it's about the value.

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

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? 

Quite a lot actually.

 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.

 And 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 ?

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.