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Planning for success in 2013 and beyond For adviser use only © 2012.

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Presentation on theme: "Planning for success in 2013 and beyond For adviser use only © 2012."— Presentation transcript:

1 Planning for success in 2013 and beyond For adviser use only © 2012

2 Confidential Restricted – Not to be disclosed beyond authorised roles within Standard Life group or authorised third parties 2 Challenges and opportunities Adviser charging will replace commission for new advice from 31 December For new clients this should be relatively straight forward to introduce. For existing clients this presents challenges and opportunities – for both advisers and providers.

3 Confidential Restricted – Not to be disclosed beyond authorised roles within Standard Life group or authorised third parties 3 What do the changes mean for advisers? Adviser impact Old model business New model business Clear client service propositions Trail commiss ion Advice events trigger … Reactively transition to adviser charging Adviser Charging Providers need to: Support the transition to adviser charging Support the continuation of commission income where the regulation allows, whilst minimising charging complexity. Profitable client charging structure Proactively migrate clients to adviser charging ASAP Reduction in trail over time Trail Commission

4 Confidential Restricted – Not to be disclosed beyond authorised roles within Standard Life group or authorised third parties 4 Understanding impact on commission income - what the regulation says EventDoes the regulation allow existing trail commission to continue? Fund switch (commission paid from the life product) (existing trail will continue on the switched fund) Fund switch (commission paid from the fund)  (existing trail will stop from the switched fund) New advice to rebalance (commission paid from the life product) (existing trail will continue) New advice to rebalance (commission paid from the fund)  (trail from the sold units will stop) Advice to rebalance given pre RDR (commission paid from the fund or the life product) (existing trail will continue) Maintaining or reducing regular payments Increases to regular payments (no additional trail paid but existing level of trail can continue) Additional single payments (no additional trail paid but existing level of trail can continue) In-specie re-registration Execution only (new trail can be paid for EO services) Continuing to pay trail commission alongside adviser charging within the same plan results in a complex charging structure A transition to adviser charging over the longer term will minimise complexity and protect revenue from future regulation in this area.

5 Confidential Restricted – Not to be disclosed beyond authorised roles within Standard Life group or authorised third parties 5 Making a successful transition 1.Finalising segmentation Identify profitable clients to offer your full service proposition. Identify lower-value clients. 2. Transition valuable clients to adviser charging Ensure your core client proposition is profitable under adviser charging. Build a structured approach to transition your clients and business. 3. Clear approach for lower-value clients Build a low-cost proposition for lower- value clients. Build a plan to transition clients. 4. Execution plan Prioritised execution plan. Focusing resources where the value lies. Four steps to prepare your business for success

6 Confidential Restricted – Not to be disclosed beyond authorised roles within Standard Life group or authorised third parties 6 Transition to Adviser Charging C NURTURE A KEEP B GROW D?D? Adviser Charging break even point Segmentation Strength of relationship Low value clients Valuable clients Develop a low-cost proposition Profitability (value)

7 Confidential Restricted – Not to be disclosed beyond authorised roles within Standard Life group or authorised third parties 7 Defining your client service propositions A clients >£100,000 B clients >£50,000 C clients <£50,000 D clients <£25,000 Access to XYZ Investment Management Programme Core Services Reporting Review Access to the XYZ Financial Advisers Ltd ?????? Review every 6 months Rebalancing as required Access to the XYZ Financial Advisers Ltd model portfolios / DFM Review every 6 months Rebalancing as required Customer website to view investment value & performance. Income tax reporting Liaise with solicitor/accountant Mortgage advice IHT planning Tel & contact at any time Newsletter 6 monthly valuation and performance reports 2 each year at our office or your preferred location Customer website to view investment value & performance. Income tax reporting Liaise with solicitor/accountant Mortgage advice IHT planning Tel & contact at any time Newsletter 6 monthly valuation and performance reports 2 each year at our office or your preferred location Access to the XYZ Financial Advisers Ltd multi- manager funds Annual review, including rebalancing Access to the XYZ Financial Advisers Ltd multi-manager funds Reactive reviews Customer website to view investment value & performance Regular contact Newsletter All other core services available for extra charge Customer website to view investment value & performance Newsletter All other core services available for extra charge Annual valuation and performance reports Self-service via online account Access to the XYZ Financial Advisers Ltd model portfolios / DFM Review every 6 months Rebalancing as required Annually at our office At extra charge at client’s request

8 Confidential Restricted – Not to be disclosed beyond authorised roles within Standard Life group or authorised third parties 8 Low cost service proposition for lower value clients Reducing cost for low-value clients Client contact Investment solutions Platforms and wrappers Back office Review your client contact strategy: 1. Telephone-based service 2. Reducing frequency of reviews 3. Delegating ongoing contact to back office staff. 4. Regular comms via Outsource time- consuming tasks: 1. Simple risk assessment tools 2. Fund monitoring and selection 3. Portfolio construction 4. Portfolio re- balancing Client self-service opportunities: Ability for the client to carry out non- advised tasks online: Valuations Obtain investment information Updating personal details Widen the scope of the back office: 1. Automating and integrating back office systems 2.Outsourcing paraplanning and admin tasks 3. Client correspondence and reactive contact Check the scope of your client agreements to understand your existing commitments

9 Confidential Restricted – Not to be disclosed beyond authorised roles within Standard Life group or authorised third parties 9 Direct proposition Compliance resource Execution only v advised regulation Terms of business Client contact strategy Infrastructure (e.g. web capability) PI cover costs & exclusions Delivering a direct proposition A direct proposition can be as expensive and complex as a full-advised proposition. Is ‘light touch advice’ the way forward?

10 Confidential Restricted – Not to be disclosed beyond authorised roles within Standard Life group or authorised third parties 10 Our view of the future and beyond A transition to adviser charging in the longer term will future proof revenue. Advisers and providers will innovate to deliver lower cost advice models facilitated by technology. Outsourcing will change the shape of advisory businesses to release more time to focus on delivering client value Advisers will continue to receive trail commission as revenue from their lower value clients in the short term. Advisers may consider full remuneration through adviser charging when the first advice event occurs. (This avoids the complexities of trail and adviser charging operating within the same plan) Advisers start to transition their high value clients to adviser charging as soon as the functionality becomes available. Advisers will review their lower value clients to make sure they are in products that facilitate adviser charging in the future and require lower intervention.

11 Confidential Restricted – Not to be disclosed beyond authorised roles within Standard Life group or authorised third parties 11 Standard Life accepts no responsibility for advice that may be formulated on the basis of this information. No guarantees are given regarding the effectiveness of any arrangement entered into on the basis of these comments.

12 Questions Standard Life Assurance Limited is registered in Scotland (SC286833) at Standard Life House, 30 Lothian Road, Edinburgh EH1 2DH. Standard Life Assurance Limited is authorised and regulated by the Financial Services Authority. Calls may be monitored and/or recorded to protect both you and us and help with our training. Call charges will vary. © 2012 Standard Life, images reproduced under licence


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