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Established in Sydney in 2013 and now also operating in the US and Europe, Practifi aims to deliver a new form of technology platform for advice businesses to run the whole organisation, not just part of it. This is a business management system that extends across an enterprise.
Leveraging Salesforce as a platform for infrastructure and security, they have added 115 customer objects which can be deployed to meet a range of customer needs. The service is designed to accommodate multi-disciplinary practices that include estate planning and tax advice in addition to financial planning.
The system can display a wide range of dashboards and provide a full perspective of all interactions an organisation is having with a client, a family, another extended group of related individuals or entities. It can also identify where multiple clients are supported by the same external third-parties.
Wherever possible extensive summaries of key information are contained within a single screen but they can be viewed from multiple different perspectives.
This is an end to end business management platform, it does not provide product speciality systems, such as portfolio management or financial planning, or for accountants an accounting platform, but delivers clients the ability to run every workflow across multiple different third party systems all in a single view. This is particularly beneficial for multi-disciplinary firms needed to use individual specialist systems. They can use Salesforce communities to build client portals for individual clients, but do not produce an off the shelf tool.
The ideal client is a growth orientated firm who have either complex business themselves, supporting multiple disciplines, very complex processes where they need to bring together several third party systems, or complex clients such as those needed by a ultra high net worth or multi-family office. I am coming across an increasing number of situations where there is a need to connect different professional specialities within larger organisation works, in the second stances this may have much to offer. (written by Ian McKenna)
Founded in 2010, the company have 700 clients live on their platform with close to $2 trillion in assets from firms with under $50 billion in assets, i.e. excluding some of their largest clients who include global banks and asset managers.
InvestCloud have created over 300 different apps which can be combined to create a wide range of content, either as end-to-end solutions or as gap filling components to supply features and functionality which an organisation may not have in their native technology proposition. They will deliver as much or as little as a customer needs. You don’t have to take the full suite of their services.
Prioritising design as a core competence means propositions can support different personas from the very digitally savvy to traditional analogue customers. Services range from client portals, adviser portals, digital on-boarding, financial planning and a wide range of other functions. It is worth looking at their periodic table of financial apps at investcloud.com to get a feel for the full range of options.
If you look at the table it highlights InvestCloud expertise in Experience (InvestCloud Blue), Management (InvestCloud Orange) Analytics InvestCloud Black and Processing InvestCloud Green. All services are fully mobile optimised and tablet-enabled.
This summer they acquired the rplan business set up by former Cofunds tech guru Andy Creak, who will be well known to anyone in the UK investment industry. This demo really only scratched the surface of what can be offered by the firm who are becoming and increasingly significant player. (written by Ian McKenna)
Founded in 2016, Clearnomics is a report writing tool to provide advisers and wealth managers with detailed market and economic insights for their clients via desktop, mobile and tablet devices.
Using a series of pre-programmed online questions, with bespoke customisation available, the adviser is able to select specific data items such as stock market and investment performance, which is of particular interest to the client, over a desired timeframe.
This will automatically create a ‘chart book’ using a combination of their Intelligent Assistant and API feeds, which can be adviser-branded and saved to the client record for use as part of the advice process in order to save the adviser time in conducting their own lengthy research documents. (Written by Jason Green)
Smartleaf is an automated rebalancing platform tool to improve efficiency and compliance for advisers.
The company was founded in 1999 originally as a D2C offering many years before the term ‘robo’ was coined. In 2003 they gained their first Bank Trust client and the proposition seen today was developed.
Smartleaf provides highly automated tax management, at scale, for any sized portfolio ranging from $100,000,000, open architecture UMA accounts, to $5 robo equity investments which in turn can save more in taxes on average than what is paid in fees.
Distributing via three product channels, the service is used by over 1,000 advisers, TAMPs (Turn Key Asset Platforms) and robo clients. The number of end users has not been disclosed.
Everyday each account is rebalanced using a series of filters and queries which select various accounts and trades. These filters are all set by the client so that Smartleaf can trade the required accounts when necessary. The system understands which accounts need to be traded and which don’t (such as unknown securities).
This produces tax savings and reduces tracking errors in the portfolio and makes it more aligned to the client’s desired asset allocation and goals.
Each trade which is suggested by Smartleaf is assigned a cost benefit score. This identifies the commissions and taxes (cost) and how much closer this trade will get the client to their chosen goal or targets (benefits).
Portfolio health check reports for advisers are also produced to give to clients which demonstrate the savings made via the tax optimisation. The average taxes saved for accounts managed on Smartleaf last year was 1.60% of portfolio value, which is more than most adviser fees. (Written by Jason Green)
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Today’s purchase by Aviva of a majority stake in Wealthify has significant implications for the whole UK robo advice community and wider personal savings market.
This move by the world's 12th largest insurer and a major asset manager is far more significant than the previous investment by LV= in Wealth Wizards and other UK robo deals.
Aviva have a far greater degree of scale and partnerships that can be leveraged to the advantage of both businesses. Aviva have been a real leader in the digital revolution with the London digital garage having set the trend now being followed by many of their peers.
While the deal keeps Wealthify as an independent business located in Wales it provides Aviva with an opportunity to open many doors for the company and harness a slick platform designed to appeal to a constituency that thinks and behaves in very different ways to previous generations. From the Wealthify perspective they no longer have the constant worry about access to capital to grow, no small benefit.
Aviva already have a Direct to Consumer platform, built on FNZ technology for investors who are looking to go the DIY route to invest in a diverse range of funds. What they did not have up until now was a simple solution for those customers who do not want to spend large amounts of time managing their finances, but are seeking an easy way to invest for their future.
It would be natural to expect Wealthify to move into pensions and Aviva’s knowledge in this area should be a major benefit. Whilst they would be wise to let Wealthify develop their own pension product, using Wealthify technology to support their substantial workplace pension and auto enrolment proposition would also be a smart move. As I have identified elsewhere this week (a link to the column will appear here on Monday) there is a compelling argument for focusing the Pensions Dashboard project around millennial auto enrolment customers in the short term. Adding the sort of execution capability Wealthify have to an Aviva Dashboard could deliver a powerful and compelling proposition to young savers.
I am not at all surprised by this move; the US market typically runs two to three years ahead of the UK in the digital wealth arena. With this deal Aviva are emulating BlackRock’s 2015 move for Future Advisor and Invesco’s 2016 Jemstep buy by acquiring robo firms early rather than build their own in order that they could quickly partner with other financial institutions and distribution businesses.
We have recently seen Blackrock make a substantial investment in Scalable Capital, the Anglo German robo firm, so Aviva are right to secure one of the more attractive firms available. There has been much debate of late around the cost of customer acquisition for start-ups with perhaps too much focus on the amount of money burned by Nutmeg who really had to break entirely new ground as the very first player of its type in the UK.
If you happen to have 9,000,000 consumers, as there are on My Aviva, you do not actually have to hit too high a conversion rate to start achieving some very worthwhile numbers
This move will cause Aviva’s peers to question if they are now at a commercial disadvantage particularly when trying to build partnerships with building societies and other savings institutions.
It could also have a substantial impact on the asset management community. Do Aviva Investors have a significant advantage over their peers with an innovative new route to market? In my view the UK asset management community is for the most part failing to recognise the opportunity to leverage simple robo solutions which whilst a tiny percentage of the market today will have obvious appeal to the next generation of savers.
There are unlikely to be enough robo advisers to supply demand from all the institutions who will wish to acquire one so they can maintain their competitive position. Primary players in this market will not want to be reliant on robos owned by competitors or others who may not always priorities their development agendas when it matters most. Unambiguous ownership will always settle such issues.
Personally I can still see room for some Robo 3.0 start-ups emerging over the next year. Buyers will however need to have a clear understanding of what represents the good, the bad and the ugly in this sector if they are to spend their cash wisely. There are some that are very attractive targets and a few I would not want to go anywhere near.
This deal may also provide significant opportunities for Aviva to deliver other products such as life and personal lines insurance to the attractive Generation X and Millennial demographics targeted by Wealthify.
While the deal opens many opportunities the hard work is yet to be done and it will be at least 2 to 3 years before we can see the benefits reflected in Aviva results.
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Honest. Constructive. Objective. No Bull.
We all have a comfort zone at work. Topics which we could talk about until the cows come home.
WealthTech propositions are my bread and butter, they sit very comfortably in my ‘safe place’.
A number of new tools, ‘artificial intelligence’, ‘machine learning’, and ‘deep learning’, have rapidly crept into the WealthTech space.
These self-teaching systems are busy revolutionising many industries. WealthTech is no exception.
You need to ask yourself whether you want to jump on the train and work them into your ‘safe place’, or rather wait for the next train to pull in.
My fear with the latter is that you'll be late!
It’s true that artificial intelligence has been around for decades, but for the majority, it’s something we have typically reserved for the latest James Bond movie.
These tools crop up regularly in our research. I talk in length to various proposition owners about how these technologies are being implemented.
More often than not, they are on their ‘to do list’ and still to be added to their roadmap.
“I’ll get back to you on that Kerry”
“We can’t disclose anything at the moment, but we’re working on it”
There is a lot of chatter about these innovative technologies. A few firms are already rolling out such services in the real world. It's these that I want to take a look at today.
To the majority of us, it’s something new. You need a certain level of skill to understand how it works. Your brain needs to tick a certain way.
It’s not always important to understand the inner workings of these technologies and algorithms.
It is important however, to understand how they are going to change the way we design and deliver financial services.
Every now and then I speak to an organisation which turns everything on its head. This is exactly what happened when we met Hedgeable.
They are primarily a technology company. Having successfully developed and deployed its own digital wealth platform in the US in 2009, the company decided to open up its architecture and partner with organisations across the globe.
The technology consists of four key open application programming interfaces (APIs).
Partner organisations will use these open APIs to form the infrastructure / back end of their digital wealth proposition. The API’s are available on a modular basis so you can pick and choose which ones best suit your business.
Hedgeable’s co-founder, Mike Kane, described the process as ‘plugging in’ their API’s into your existing framework.
Once you have the back end in place, you can add on a number of optional customer facing modules.
One of these, being a truly fascinating artificial intelligence module.
The following video from the recent Finovate Spring conference gives a great feel for the system.
Digital Wealth Insights analysts are producing a more extensive analysis of Hedgeable’s functionality which will be available from this site shortly.
We recently reviewed Abaka’s intelligent savings proposition targeted at employers looking to improve the financial wellbeing of their employees. (see their full review here)
What makes Abaka different from other workplace propositions is that its powered by artificial intelligence and delivered via both a mobile App and a chatbot called AVA.
This technology collates and translates the employee’s data to provide insight and nudges into their personal financial life. It also provides comparisons of their financial life against that of their peers or others with similar circumstances as themselves.
Crucially, Hedgeable and Abaka are both LIVE physical propositions available to use in the UK today.
We are in an era where technology can take our data, read it, understand it, and provide us with proactive insights to make changes before reaching a particular unhealthy situation.
Over the course of the next few months I’ll be looking at ways in which artificial intelligence is changing the way we develop and deliver financial services.
I highly recommend getting on the artificial intelligence train sooner rather than later. Step out of your comfort zone.
It’s incredibly exciting!
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Our income, expenditure and debt define how we live our lives today, tomorrow and ultimately into future. Is it not crucial therefore to ensure that every person gets the management of these fundamental processes right before approaching any actual investment, protection or retirement advice?
The Office for Budget Responsibility identified that credit card debt in May 2016 was £2,397 per household. Based on an average interest rate and minimum payment this would take 25 years and 6 months to repay. It also suggested that consumer borrowing trends will result in most UK households spending more than they earn for the rest of the decade.
The savings landscape is changing. There is no longer any reason for savings to be regular or centered on a single long-term goal now that there are micro saving tools to encourage consumers to save little and save often, as and when funds become available.
Of all the propositions I analyse on a daily basis there are very few with which I actively engage. Moneybox (www.moneyboxapp.com) is an exception. It is a great example of using micro savings to contribute towards an ISA or Investment account. I was able to save £94 in six weeks simply by rounding up my daily spending transactions to the nearest £1.
Cleo is another example of a Chatbot (www.meetcleo.com) budgeting tool which I use regularly. Instead of logging into my on-line banking or trying to make sense of a pie chart, I am able to send a simple text to Cleo to get the information I need instantly.
Whilst these two tools don’t have all the optimal functionality, they actively help me save and move towards a better financial life.
To provide a truly effective automated proposition it is crucial that we focus on helping the consumer build their financial life from the ground up.
We would encourage those organisations building automated financial service propositions to think of the end consumer and the journey they need to take in order to get in a position to actively engage in long term savings.
Further access to our analysis can be found at www.digitalwealthinsights.com (currently in beta). We aim to provide our audience with objective comparisons alongside our own informed analysis of automated financial service propositions, market trends and clarity around topics which typically create confusion.
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