Altus gave us the clearest picture we have ever had of our whole operation and a great foundation for building our future business.
Mike Douglas, CS Transformation Director, Aegon
Nice to speak to someone who really got the market and was well tuned in.
Matt Kane, CEO and Chief Ninja of robo-adviser Hedgeable, based in New York
Post-RDR, post 2014 ‘pension freedoms’, and an acknowledged 'Advice chasm' (not 'gap'), the wealth management world has quite literally been turned on its head; major business transformation is once again top of the agenda.
Responsibility for future financial provision continues to move unabated from the State to a woefully under-prepared individual as they move from ‘wealth accumulation’ into the ‘in-retirement income’ stage of their life, and increasingly we see:
- The dominance of investment – or wrap – platforms disrupting the more traditional channels.
- Ever more focus on the D2C marketplace, and the emergence of the new breed of robo advisers - yet few players have achieved any real traction… and for those with an intermediated history, there remains a real sensitivity not to upset those who have traditionally fed it.
- Confusion and questions surrounding the different advice models - especially 'simplified' - despite Regulatory ‘clarification'.
- The once clear demarcations in the value chain now blurred as players are increasingly encroaching into each other’s territories – asset managers, data providers, aggregators and traditional back office systems are broadening their footprint.
- Pressure on price and margin being felt right across the value chain.
- Centralised Investment Propositions (CIPs) becoming a key component of many investment propositions.
- Increased focus on low-cost passives providing a real challenge to the in-flows of the ‘active’ players.
- Intense scrutiny of the value and benefit of DFM propositions against alternative multi-asset solutions.
We are also now witnessing the ever increasing importance (and integration) of risk profiling and asset allocation tools into the whole financial planning and investment process, including the need to manage cash flow and understand the longevity risk of living too long - not least in the robo advice space. And of course, there remains the ever-present reality of increased Regulatory scrutiny and cost.
For existing players – in light of the unprecedented change taking place - how do they retain what they’ve spent years (possibly decades) - accumulating? And further, how do they grow their AuA to the scale required? While new fintech entrants are hungrily eyeing and targeting that same back book of assets. and that's before they consider the next wave of entrants on the horizon - the likes of Google, Amazon, PayPal, Facebook, each investing millions in deep learning artificial intelligence, real use of Big Data, new technologies such as blockchain - looking to disrupt the market in ways we have not witnessed in our lifetimes...
At a time when things are really hotting up, a cool, calm head and clear thinking are required:
- Who are you targeting?
- With what?
- Through what channels?
- At what price?
- With what service and support?
Importantly, how much of the value chain are you aiming to control, and how will you make sure the efficiencies. the scale, the profit - and the customer experience - materialise?
At Altus we believe it is this critical debate - informed by a real understanding of the marketplace and the key market trends and drivers, and insights from home and abroad - that is fundamental to creating a compelling value proposition and developing a proposition that truly meets the specific requirements of the end-customer.