‘Reviewing your choice of Platform
in light of RDR’
Business Development Director
Agenda
 The impact the RDR platform paper may have on your
business
 Tips to support and enhance your ongoing platform
due diligence
 Delivering enhanced planning capability
Future drivers impacting on business
RDR and TCF will be the dominant drivers for the future changes
49%
The RDR (Retail Distribution Review)
44%
Treating Customers Fairly
33%
A desire to clearly articulate your client propositions
27%
A need to segment your client base
26%
A desire to move towards fees
11%
None of these
6%
Don't know
0%
10%
20%
30%
Base: All Respondents (387)
Source:on
NMG
Census
February
2009
What future drivers will have an impact
yourIFA
business
over
the next
12 months? Please tick all that apply.
40%
50%
60%
Meeting the requirements of the FSAs
Retail Distribution Review
 From 2012 all Advisers operating as Professional Financial
Planners will be required to agree the price of advice separate to
any commissions generated through the sale of a product
 Firms wishing to grow recurring revenues will need to
demonstrate the value that clients continue to receive for
ongoing advisor charges
 Advisers will need to ensure absolute transparency of charges
Single platforms vs. independence
 FSA accepts that for client groups where needs are
similar and suited to benefits of a wrap platform, the
use of a single suitably comprehensive wrap solution
will not jeopardise advisers’ independent status.
FSA CP 10/29 – Use of single platform
 One platform for all clients for all investments





Requires clearly defined client bank
Similar range of needs and objectives
Selected platform can address all needs
Some clients will have needs not addressed by wrap
These “outlier” clients would need to be “screened out”
 One platform for all clients for most investments
 A more likely, realistic and pragmatic scenario
 Means “default” wrap used
 Allows room for off-platform/niche solutions
 One platform for some clients
 Single wrap for defined group with same needs
 Means off-platform or other platform used for clients outside this
client group e.g. one wrap per market
Multiple Platforms or a Dual Charging Platform????
Composite Charges
Explicit Charges
(Bundled)
(Unbundled)
Annual Charges
Initial Charges
Transactional advisers
‘product-led’
Supporting transition
Elevate Charge
Financial planners
‘Investment-led’
Itemised charges
Itemised charges
Annual Management
Charge
Elevate Composite/Cofunds/Fundsnetwork/
/Skandia/SL Fundzone
SL Wrap
Fund manager
rebates
paid to client
account
Flexible
Adviser
Remuneration
Initial Charge
Net AMC
Flexible
Adviser
Remuneration
Elevate
Portfolio
Charge
Elevate Explicit/Transact/JamesHay/
Novia/Ascentric/Nucleus/Lifetime
 Tips to support and enhance your ongoing platform
due diligence
Wraps – a practical definition
The FSA defines wrap platforms as follows:
‘Platforms are online services, used by intermediaries
(and sometimes consumers directly)
to view and manage their investment portfolios.’
FSA Discussion Paper on platforms, June 2007
Wraps bring operating benefits
FROM THERE & THEN
TO HERE & NOW
#3
Funds
supermark
et
Life and
pensions
Life and
provider
pensions
Life and
provider
pensions
provider
#2
Trading
Platform and
Products
Client
Management
Backoffice
software
SIPP
provider
POS / Advice
tools
#3
Exchange
Life and
Life and
#3 pensions
provider
pensions
provider #2
#2
Advice
tools
Back-office / MI
Wraps = a venue for investment
Due diligence
 3 elements influence relevance & value of wraps:
1. Type of client you wish to advise
2. The relationship you wish to offer your clients
3. The investment proposition relevant to your market
 Some “niche” areas not served by wraps – yet!
 So what should I consider when choosing a wrap…
Due diligence
1. Strategically
 Identifying a wrap that meets:
•
•
•
The operating requirements of your desired business model
The investment proposition needs of your target clients
Criteria you use to assess fitness of a key business supplier
2. Tactically (i.e. client by client)
 Confirming whether utilisation of the wrap platform you have
selected is suitable for a specific client
 Deciding whether to “screen out” clients for whom a wrap-based
proposition is not suitable
Due diligence
 FSA – Fact-sheet:
 Platforms: using fund supermarkets and wraps
(considerations when examining wrap platforms & their providers)
 Your Business






Agree that wraps offers business and client benefits
Understand the client types or life-stages you wish to serve
Articulate the client value proposition and processes you will deliver
Have a robust investment proposition you wish to deliver
Create criteria a wrap has to satisfy for your model - based on FSA Fact-sheet
Include qualities in a business supplier that protect/enhance your reputation
• e.g. financial strength, disaster recovery, added value services etc.





Create a short-list before RFI
Conduct interviews/site visits
Select wrap
Decide how often you will renew your due diligence exercise
Document it!!
 AXA Wealth – Elevate Wrap Platform – Our story:
 Due Diligence – short leaflet and comprehensive document
 “Why We Chose Elevate” – AXA Business Consultancy
 Delivering enhanced planning capability
What is Elevate- Just a bit of technology…
Primary
Use as a
phone and
listen to
music
Secondary
Camera
Calculator
Email
Internet
Diary
What else
- Market
leading
Bespoking
- Ergonomic
design
- Upload/
download your
own music/
videos
- Future
updates
- Create your
own playlists
So What?
Entertainment
system
Portable office
Digital photo album
Phone and MP3
- Download your
own apps
Elevate is an enabler, it allows you to
do as much or as little as you want
GPS
Place
business
Tools
Reports
Platform and
Business
consultancy
- Product
guarantees
- Recognised
brand
- Financial
stability
- Commitment
to market
- Future
development
Craig Monahan- Platform Consultant Presentation
- Own logo and
colour scheme
- Improve client
experience
- Set your own
pricing structure
and remuneration
levels
- Increase
business
efficiency
- Create your
own model
portfolios
- Choose your
own best buy lists
- Help clients be
more engaged
with investments
- Tool to place
business
Elevate proposition














Strategic importance to the AXA group
Built on sound principles
Sensible use of award-winning technology
Technically innovative tax wrappers
Straight Through processing
On-Line Anti-Money Laundering
Negative Affirmation
Supports financial/lifestyle planning
Access to the right investments
Underpins a Flexible Remuneration Strategy
No barriers to entry or exit
RDR friendly
Clear upgrade path
Specialists to support transition
Risk report
• Consistent with
offline version and so
can be used in
conjunction
• Provides an audit trail
and tangible output
• Stored in the client
document library for
future reference
• Current risk rating
stored on client
account
•Can store your own
Enhancing your investment proposition
OBSR
 Old Broad Street Research (OBSR) model portfolios
 Created and managed by OBSR
 Directly aligned to TP Risk Assessment outputs
 Reviewed quarterly, alerted when changed
 Enables outsourcing of fund selection
Adviser
 Adviser model portfolios
 Created and managed at adviser or firm level
 May be applied across a number of different clients
 Efficient management of multiple portfolios with similar needs
 Client–specific model portfolios
 Created and managed at firm or adviser level
 Applied to one client account only
 Can be applied across different wrappers in the same account
Client
Enhancing your planning capability

Ongoing Management of risk is critical

Model Portfolios help with Core Investment
Strategies

Models can increase service to more clients

Technology & Wraps can deliver the
efficiencies required – STP

Dual Charging Option

Verbatim funds are listed on the Elevate
Platform
Questions?