Survive & Thrive, are you ready for 2013 In this 30-minute workshop, we invite advisers to take a moment to reflect on the...
Who is Architas?       •     Established in 2008       •     £11.3bn AUM and advice*                                      ...
Survive & Thrive - Are you ready for 2013?   “Forget about surviving and get       excited about thriving”                ...
Number of Questions                                                                                         Size of Audien...
5For financial advisers only, This presentation should not be distributed to or relied upon by retail customers.
The rise of the multi-asset Fund of Funds …a brief history lesson  Single                                       Multi-    ...
The rise of the multi-asset Fund of Fund   100000                                                                         ...
Centralised Investment Propositions What the FSA had to say? What is it….. • A standardised approach to providing investme...
Replacement Business What the FSA had to say? Whilst the guidance covers all recommendations to switch between contracts, ...
Assessing Suitability What the FSA had to say?   •      Lack of consistency within businesses   •      Risk profiling – ov...
IFA or Financial Planner                                                                             11For financial advis...
IFA or Financial Planner   Its easy to lose sight of what’s important……Risk                                               ...
IFA or Financial Planner Managing Financial EmotionsRemark?                                                               ...
IFA or Financial Planner Managing Financial Emotions                             “Coast is clear…quick buy!”              ...
IFA or Financial Planner Managing Financial EmotionsREMARK?                                                               ...
The case for multi-asset investing   •          No one single market consistently outperforms   •          Diversification...
The case for multi-asset investing Active, Passive or……Blended       "Predicting the future is hard, especially if it hasn...
The case for multi-asset active Active, Passive or……Blended?     Active                                                   ...
Fund selection is not simple                               Range between best and worst fund                      600%    ...
The case for multi-asset active     Active, Passive or……Blended?                                                          ...
The case for multi-asset passive Active, Passive or……Blended?     Passive                                                 ...
The case for multi-asset passive Active, Passive or……Blended?                                                             ...
The case for multi-asset passive  Importance of Due DiligencePhysical replication Hold all of the stocks in the index Mo...
The case for multi-asset blended Active, Passive or……Blended?     Active v Passive                                        ...
The case for multi-asset blended Active, Passive or……Blended?                                  Embrace the best of both s...
The case for multi-asset investing  Active, Passive or……Blended The decision is yours There is no one right answer Art,...
A compelling proposition       Architas offer a range of investment solutions including a range of risk       profiled fun...
Architas asset allocation approach                                                     Strategic                          ...
Volatility proof statement• eValue FE risk tolerances internal check on Architas portfolios                               ...
Architas proposition Platform and Risk Profiler Flexibility               Architas platform availability                  ...
Architas proposition Your potential concerns…..                                                                           ...
Summary • The case for Fund of Fund continues to grow. • FSA and Changing Landscape is fuelling this growth • Consider the...
Happiness                                                                                         Keeping up with the Jone...
REMARK                                                                             34For financial advisers only, This pre...
Important informationIssued by Architas Multi-Manager Limited, which is authorised and regulated by the Financial Services...
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Architas

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Architas

  1. 1. Survive & Thrive, are you ready for 2013 In this 30-minute workshop, we invite advisers to take a moment to reflect on their views and beliefs on delivering advice and making investment recommendations. During this interactive session, Architas will revisit the key regulatory and investment themes that played out during 2012, and offer perspective on what this actually means to the end investor for 2013 and beyond. The objective of the Architas session is to focus on you and your client, and to share our experiences and views in a post-RDR environment and some of the realities we face within the financial services market, including; - The “battle” for margin between adviser, asset manager and platforms - The potential pitfalls of risk profiling - The good and the bad of passive investingFor financial advisers only, This presentation should not be distributed to or relied upon by retail customers.
  2. 2. Who is Architas? • Established in 2008 • £11.3bn AUM and advice* Five Star Award, • 60 employees Investment Provider & Packager Financial Adviser Awards winner • Head office - London 2012 • Member of the AXA group • Areas of expertise  Fund management: funds of funds/ funds of mandates  Advisory services: selection & recommendation of third party funds  Fund structuring: UK and Dublin fund operating platform  Investment talent & focus specialists across active, passive, blended & capital protected funds  Robust investment process in-depth research on funds and While we strive to achieve further accolades, there is no asset managers guarantee to win similar awards in the future*As at November 2012 Architas AUM is £7.3bn 2 For financial advisers only, This presentation should not be distributed to or relied upon by retail customers.
  3. 3. Survive & Thrive - Are you ready for 2013? “Forget about surviving and get excited about thriving” 3For financial advisers only, This presentation should not be distributed to or relied upon by retail customers.
  4. 4. Number of Questions Size of Audience REMARK 4 For financial advisers only, This presentation should not be distributed to or relied upon by retail customers.
  5. 5. 5For financial advisers only, This presentation should not be distributed to or relied upon by retail customers.
  6. 6. The rise of the multi-asset Fund of Funds …a brief history lesson Single Multi- Multi- manager Alternatives manager asset balanced Capital preservation, Specialisation: no single Asset class Alternatives focused on reduction of market risk, manager best at everything diversification specific objectives diversification 1980s 1990s 2000s 2010s Black Asian Dot. UCITS III GFC Wednesday Crisis comEquity and Absolute Tail risk hedges Property Commodities bond Return Alternative yield 6 For financial advisers only, This presentation should not be distributed to or relied upon by retail customers.
  7. 7. The rise of the multi-asset Fund of Fund 100000 FSA • Centralised Investment 80000 Proposition Gross Sales 60000 • Replacement Business £mn • Assessing Suitability 40000 Cumulative Changing Landscape 20000 • IFA to Financial Planner Gross Sales • Views on outsourcing 0 £mn • Role of the Asset Manager 2012 ytd 2002 2004 2006 2008 2010 2003 2005 2007 2009 2011 • Implementation of PlatformsFUNDS OF FUNDS CONTINUE TO GROW MARKET SHARERichard Saunders, IMA Chief Executive, said:“Funds of funds continued to be popular with investors in the third quarter of 2012. While sales were lower than a yearago, in common with the wider industry, total funds recorded another new high relative to the industry as a whole. Asimilar picture emerged for tracker funds, which have been on an upward trend relative to the rest of the industry forthe last couple of years. In contrast, ethical funds have now seen net outflows in three of the last four quarters.”Source: Chart Data - IMA Sept 2012, quote - IMA 5 Nov 2012 7 For financial advisers only, This presentation should not be distributed to or relied upon by retail customers.
  8. 8. Centralised Investment Propositions What the FSA had to say? What is it….. • A standardised approach to providing investment advice, for example: – Portfolio advice services – Discretionary investment management – Multi-manager/fund of funds What are the FSA’s concerns..… • Don’t have an inherent problem with CIPs • Concerns around shoe-horning / churning • Systems and controls Due Client Design Review the diligence and Integration segmentation criteria market selection 8For financial advisers only, This presentation should not be distributed to or relied upon by retail customers.
  9. 9. Replacement Business What the FSA had to say? Whilst the guidance covers all recommendations to switch between contracts, once a firm has developed a CIP, there may well be an objective to move as many clients as possible into the new proposition. Key issues: Poor outcomes can occur if firms fail to: • Consider objectively their client’s needs and objectives • Collect necessary information on the client’s existing investments and the recommended new investment • Implement a robust risk-management system to mitigate the risk of unsuitable advice and poor client outcomes. 9For financial advisers only, This presentation should not be distributed to or relied upon by retail customers.
  10. 10. Assessing Suitability What the FSA had to say? • Lack of consistency within businesses • Risk profiling – over reliance, poor questions, lack of understanding • Poor risk descriptions - Balanced? What is in a name? • Capacity for Loss – the journey • Portfolio assets selected did not display risk characteristics to match clients needs • Failure to consider other factors – time horizons, goals etc • Insufficient documentary evidence 10For financial advisers only, This presentation should not be distributed to or relied upon by retail customers.
  11. 11. IFA or Financial Planner 11For financial advisers only, This presentation should not be distributed to or relied upon by retail customers.
  12. 12. IFA or Financial Planner Its easy to lose sight of what’s important……Risk RelationshipsFinancials ValuesProcess /Service Lifestyle /Goals Wellbeing Managing Financial Emotions Remark? 12 For financial advisers only, This presentation should not be distributed to or relied upon by retail customers.
  13. 13. IFA or Financial Planner Managing Financial EmotionsRemark? 13For financial advisers only, This presentation should not be distributed to or relied upon by retail customers.
  14. 14. IFA or Financial Planner Managing Financial Emotions “Coast is clear…quick buy!” Questions? “Things are bad…sell!”REMARK? 14For financial advisers only, This presentation should not be distributed to or relied upon by retail customers.
  15. 15. IFA or Financial Planner Managing Financial EmotionsREMARK? 15For financial advisers only, This presentation should not be distributed to or relied upon by retail customers.
  16. 16. The case for multi-asset investing • No one single market consistently outperforms • Diversification – may help to reduce Risk • The smoothest way to invest? • The least ‘Emotional’ journey? 01/12/2002 01/12/2003 01/12/2004 01/12/2005 01/12/2006 01/12/2007 01/12/2008 01/12/2009 01/12/2010 01/12/2011 30/11/2003 30/11/2004 30/11/2005 30/11/2006 30/11/2007 30/11/2008 30/11/2009 30/11/2010 30/11/2011 30/11/2012 IMA OE £ High Yield 19.83 18.76 33.45 21.59 39.24 7.28 66.75 24.51 15.34 18.68 IMA OE Asia Pacific Excluding 18.26 14.18 28.25 21.22 13.53 2.74 45.26 23.07 0.59 18.65 Japan 17.23 12.48 24.03 19.34 9.58 -15.75 42.96 16.94 -0.04 15.89 IMA OE Europe Excluding UK 13.09 10.96 23.58 17.66 8.32 -20.76 34.29 14.04 -1.02 15.25 IMA OE Global 13.01 10.18 20.31 8.89 4.73 -25.21 32.63 13.49 -2.00 13.89 IMA OE Japan 12.79 7.93 19.94 6.30 3.92 -28.42 28.42 13.28 -3.09 12.40 IMA OE Money Market 12.20 6.56 18.59 3.26 2.20 -28.70 19.82 12.66 -3.91 11.13 IMA OE North America 9.51 6.43 15.71 1.66 0.30 -32.29 10.98 12.49 -5.48 11.10 IMA OE Property 2.20 2.54 6.70 -2.36 -0.07 -33.35 6.72 3.12 -5.50 2.85 IMA OE Technology & Telecommunications 1.99 0.02 5.84 -2.41 -7.98 -34.98 6.16 2.77 -9.48 0.39 IMA OE UK All Companies 0.80 -2.44 3.60 -6.58 -9.18 -40.57 0.82 0.33 -12.81 0.26 IMA OE UK GiltsREMARK? Source: Morningstar as at November 2012, cumulative total return. Sterling annualised total return. Past performance is not a guide to future performance. The value of an investment can go down as well as up and is not guaranteed. Investors could get back less than they invest. The most up-to-date information can be obtained by calling the Architas Broker Desk on 020 8562 4900
  17. 17. The case for multi-asset investing Active, Passive or……Blended "Predicting the future is hard, especially if it hasnt happened yet." -- Yogi Berra 17For financial advisers only, This presentation should not be distributed to or relied upon by retail customers.
  18. 18. The case for multi-asset active Active, Passive or……Blended? Active 18For financial advisers only, This presentation should not be distributed to or relied upon by retail customers.
  19. 19. Fund selection is not simple Range between best and worst fund 600% 500% 511.45% 400% 359.75% Return % 300% 200% 168.38% 91.49% 100% -2.64% 18.69% 0% UK all companies Corporate Bond Global Emerging -100% Markets Best performing funds in IMA sector Worst performing funds in IMA sectorSource: Morningstar December 2002 – November 2012 cumulative total return . Past performance is not aguide to future performance. The value of an investment can go down as well as up and is not guaranteed.Investors could get back less than they invest. The most up-to-date information can be obtained by callingthe Architas Broker Desk on 020 7562 4900
  20. 20. The case for multi-asset active Active, Passive or……Blended? • Search for consistency • Search for outperformance • Search for Specialism• Robust processes• Consistency of Implementation• Wholly unfettered• Effectively Risk Managed 20 For financial advisers only, This presentation should not be distributed to or relied upon by retail customers.
  21. 21. The case for multi-asset passive Active, Passive or……Blended? Passive 21For financial advisers only, This presentation should not be distributed to or relied upon by retail customers.
  22. 22. The case for multi-asset passive Active, Passive or……Blended? Charges Beta exposure Simple to understand, transparent, process driven Removes emotion Consistent alpha difficult to achieve 22For financial advisers only, This presentation should not be distributed to or relied upon by retail customers.
  23. 23. The case for multi-asset passive Importance of Due DiligencePhysical replication Hold all of the stocks in the index More expensive Lower tracking error Size Pragmatic replicationPhysical replication – sampling/optimising Stratified sampling  Hold representative stocks Optimisation  “Black box” technique using statistical modelling 23 For financial advisers only, This presentation should not be distributed to or relied upon by retail customers.
  24. 24. The case for multi-asset blended Active, Passive or……Blended? Active v Passive 24For financial advisers only, This presentation should not be distributed to or relied upon by retail customers.
  25. 25. The case for multi-asset blended Active, Passive or……Blended?  Embrace the best of both styles  Seek most efficient alpha in Actives Blending  Seek most efficient tracking in Passives  Blend proportionately to deliver scope for outperformance at attractive price  Manage as a portfolio of assets  Rebalanced within risk tolerances 25For financial advisers only, This presentation should not be distributed to or relied upon by retail customers.
  26. 26. The case for multi-asset investing Active, Passive or……Blended The decision is yours There is no one right answer Art, Science…or Both Investment is based on a belief Do your homework ! Know the facts ! Make decisions based on the outcome Perform and document your Due Diligence 26 For financial advisers only, This presentation should not be distributed to or relied upon by retail customers.
  27. 27. A compelling proposition Architas offer a range of investment solutions including a range of risk profiled funds to suit the varying needs of today’s investor Architas Multi-manager funds Architas MM Strategic Bond Architas MM Monthly High Income Architas MM UK Equity *Risk profiles have been calculated on a subjective basis and may not be the same as other providers. It should therefore not be compared to the funds’ actual volatility rates, or to funds or models from other providers. • The fund(s) do not aim to protect all of Capital your client’s investment nor do they protected guarantee any of your client’s investment. solutions • There are circumstances where the protection could fail.The value of an investment can go down as well as up and is not guaranteed. Investors could get back lessthan they invest. The most up-to-date information can be obtained by calling the Architas Broker desk on020 7562 4900 or visiting our website www.architas-mm.com 27For financial advisers only, This presentation should not be distributed to or relied upon by retail customers.
  28. 28. Architas asset allocation approach Strategic Tactical Tool: Global CAP:Link™ Proven, long term stochastic Decisions made by Architas asset allocation experts Portfolio Management team Fixed volatility bands using 15 Tactical bets on regions, asset years forward looking model classes or styles Quarterly updates, resulting in But always ensure risk remains quarterly adjustment of the within targeted band strategic asset allocation Architas Multi-Asset Active Funds    Architas Multi-Asset Blended Funds  Architas Multi-Asset Passive Funds   28For financial advisers only. This presentation should not be distributed to or relied upon by retail customers.
  29. 29. Volatility proof statement• eValue FE risk tolerances internal check on Architas portfolios  Above passive risk level figure  Within 0.25% of passive risk level figure• All funds are shown to rest within agreed volatility bands For illustrative purposes only. Using a sample set of data from 2012. 15 Year time horizon.Latest version of document available on request, from broker desk 020 7562 4900 or emailBroker.Desk@architas-mm.com. The value of an investment and the income from it can fall as wellas rise as a result of market and/or currency fluctuations.For financial advisers only, This presentation should not be distributed to or relied upon by retail customers.
  30. 30. Architas proposition Platform and Risk Profiler Flexibility Architas platform availability Architas risk profiling Elevate Fidelity FundsNetwork Risk management: eValue FE Transact Cofunds Risk mapping: Standard Life Wrap DTL / Dynamic Planner Nucleus Finametrica Ascentric More to come AJ Bell Hargreaves Lansdown More to come Flexibility to fit Architas proposition with as many IFA business models as possible 30For financial advisers only, This presentation should not be distributed to or relied upon by retail customers.
  31. 31. Architas proposition Your potential concerns….. More control over process. Joint Loss of control over investment process process design, personal relationships with investment managers Significant scope to develop tailor-made Non-distinctive proposition propositions fit for your clients’ needs IFA procures: robust / consistent Difficult to demonstrate value for investment process, competitively priced money of investment solution investment solution Ability to develop propositions that Reduced margins ensure sufficient margins for advice / service post RDR 31For financial advisers only, This presentation should not be distributed to or relied upon by retail customers.
  32. 32. Summary • The case for Fund of Fund continues to grow. • FSA and Changing Landscape is fuelling this growth • Consider the changing role of the Financial Planner • The role of the Multi-Asset Manager • Your decision…your choice Active Passive Blended • “Everybody has a plan until they get punched in the face.” 32For financial advisers only, This presentation should not be distributed to or relied upon by retail customers.
  33. 33. Happiness Keeping up with the Jones’ REMARK 33 For financial advisers only, This presentation should not be distributed to or relied upon by retail customers.
  34. 34. REMARK 34For financial advisers only, This presentation should not be distributed to or relied upon by retail customers.
  35. 35. Important informationIssued by Architas Multi-Manager Limited, which is authorised and regulated by the Financial Services Authority.The value of investments and the income from them can fall as well as rise and is not guaranteed which means your clients could get backless than they invest. Past performance is not a guide to future performance. Changes in exchange rates will affect the value of investmentsmade overseas. Investments in newer markets, smaller companies or single sectors offer the possibility of higher returns but may also involvea higher degree of risk.The value of investments can fall as well as rise purely on account of exchange rate fluctuations.You can invest in the funds mentioned in this presentation through a number of financial products. They are intended to be medium (at leastfive years) to long terms (over 10 years) investments.This document does not constitute an offer to sell or buy any share in the Fund. Information relating to investments is based on research andanalysis undertaken or procured by Architas Multi-Manager Limited for its own purposes and may have been made available to othermembers of the AXA Group of Companies which, in turn, may have acted on it. Whilst every care is taken over these comments, noresponsibility is accepted for errors and omissions that may be contained therein. It is therefore not to be taken as a recommendation toenter into any investment transactions.If you require further information on any of our funds the full prospectus is available on request. The key investor information document(KIId) replaced the simplified prospectus for all our funds 1 July 2012. The information in the prospectus, and KIId is produced by theauthorised corporate director of the funds (Architas Multi-Manager Limited). It is designed to help investors understand the nature and therisks of the funds and to enable them to make an informed decision before investing.AXA is a worldwide leader in financial protection and wealth management. In the UK, one of the AXA companies is Architas Multi-ManagerLimited, an investment company that provides access to other investment managers’ services through a range of multi-manager solutions,including regulated collective investment schemes. Architas Multi-Manager Limited is a company limited by shares and authorised andregulated by the Financial Services Authority. It is registered in England: No. 06458717. Registered Office: 5 Old Broad Street, London, EC2N1AD. As part of our commitment to quality service and security, telephone calls may be recorded.For full details of our up-to-date performance figures, please visit www.architas-mm.com. You can also contact the Architas Broker Desk on020 7562 4900 or email Broker.Desk@architas-mm.com. For quality purposes.

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