Financial Advisory

Financial Advisory

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Introduced by: Pollyanna Harper, BlackRock iShares

Expert: Mark Hopcroft, Embark Group

Facilitator: Colette Dunn, Milliman UK

In the current regulatory and low interest rate environment advisers have to work harder than ever to get returns for clients.  This means that that advisers need to continue to be smarter with their time and prioritise their client bank.

The session was introduced by iShares who said that the advisers in the room probably put their clients into tiers and asked: how do you make a profit from tier three clients?  iShares is working with Embark to help support advisers.  Embark is an Adviser Platform that is in the process of launching a Retail Platform.  Embark is working closely with iShares to secure a successful retail launch.

The expert, from Embark, gave a short presentation to give food for thought for the session.  He stated that the ‘unserved’ fall into a few categories including Millennials and the low mass market.  The requirement is for technically slick and low cost solutions.  To serve the ‘unserved’ there is a need for younger advisers to come into the market, and for there to be new technology in place to access these clients. 

Most advisers tend to use 3-5 platforms, some of which provide great service and some of which do not.  Advisers are often reluctant to move from existing platforms, even where the service levels are not good, as it is onerous and easier in the short-term to stick with the familiar. 

Embark’s retail platform uses a robo-advice model with human interaction to support at key points.  When the work is process driven, the robo-advice is sufficient but when there is any complexity or confusion, human interaction is required.  Any human interaction is obviously more expensive.  The US platform, Betterment, was provided as a good example of a slick platform that serves clients and supports advisers.

The decumulation market is where much of the advice need and value sits as it is complex and there are large amounts of client money.  We had a discussion about the difference between a ‘customer’ and a ‘client’ with the conclusion being that ‘customers’ are transactional and may involve a single purchase through an adviser whereas the adviser will have an on-going relationship with their ‘client.  We noted that, even post RDR, there is no need to have on-going relationships with everyone and that it is acceptable to have transactional ‘customers’ on the books.