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Axa Distribution Services
Axa Distribution Services
Axa Distribution Services
Axa Distribution Services
Axa Distribution Services
Axa Distribution Services
Axa Distribution Services
Axa Distribution Services
Axa Distribution Services
Axa Distribution Services
Axa Distribution Services
Axa Distribution Services
Axa Distribution Services
Axa Distribution Services
Axa Distribution Services
Axa Distribution Services
Axa Distribution Services
Axa Distribution Services
Axa Distribution Services
Axa Distribution Services
Axa Distribution Services
Axa Distribution Services
Axa Distribution Services
Axa Distribution Services
Axa Distribution Services
Axa Distribution Services
Axa Distribution Services
Axa Distribution Services
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Axa Distribution Services

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  • 1. The drive to build value: For clients, advisers & practices 14-15 January 2010 This presentation is for professional financial advisers only. It should not to be distributed to, or relied upon by, retail clients.
  • 2. <ul><li>The drive to build value: for clients, advisers & practices </li></ul><ul><li>Is... </li></ul><ul><li>A clearly defined vision for your business </li></ul><ul><li>A clearly defined offer for your client </li></ul><ul><li>A clearly defined service offer </li></ul><ul><li>A clearly defined investment offer </li></ul><ul><li>Clearly define where you add value to your clients and where you build value in your business </li></ul>19/01/10 The drive to build value Jan2010
  • 3. Agenda <ul><li>What do your clients consider value? </li></ul><ul><li>What determines real value? </li></ul><ul><li>Delivering that value </li></ul><ul><li>Effective deployment </li></ul><ul><li>Summary </li></ul><ul><li>Questions </li></ul>19/01/10 The drive to build value Jan2010
  • 4. Value to clients <ul><ul><li>Peace of mind </li></ul></ul><ul><ul><li>Reliability </li></ul></ul><ul><ul><li>Trust </li></ul></ul><ul><ul><li>Family security </li></ul></ul><ul><ul><li>Control </li></ul></ul>19/01/10 The drive to build value Jan2010 <ul><ul><li>Time Saving </li></ul></ul><ul><ul><li>Relationship </li></ul></ul><ul><ul><li>Proactive </li></ul></ul><ul><ul><li>Accessible </li></ul></ul><ul><ul><li>Save / make money </li></ul></ul>
  • 5. Value to clients 19/01/10 The drive to build value Jan2010 3. Specialist Advice <ul><li>Ability to utilise knowledge </li></ul><ul><li>Highly technical / complex markets </li></ul><ul><li>Discretionary Fund Management </li></ul>Significant value to those clients in more sophisticated situations 1. Transactional / Administration <ul><li>Product selection </li></ul><ul><li>Putting a policy in place </li></ul><ul><li>Providing valuations </li></ul><ul><li>Maintaining files & records </li></ul>Limited value in client’s mind 4. Service / Relationship <ul><li>Delivering on promises </li></ul><ul><li>Strategic Financial Planning </li></ul><ul><li>Disciplined reviews </li></ul><ul><li>Understanding client needs/goals </li></ul><ul><li>Trust, accessibility etc </li></ul>Highly valued by all clients 2. Advice <ul><li>Generic advice on product </li></ul><ul><li>Basic information provision </li></ul>Value dependent on experience of client
  • 6. The advice market dilemma <ul><li>Mis-match between how time is spent and what clients value </li></ul>19/01/10 The drive to build value Jan2010 Time spent by Adviser Adviser Activity Value perceived by client Client Value ADVICE PROCESS Fact Build Quote Select Advise Monitor Review Amend Find Plan Research Product
  • 7. Research: What are we trying to achieve? 19/01/10 The drive to build value Jan2010 Figures produced December 2009. Source: The Exchange. Figures assume the standard initial commission is taken. In cases where the commission and charges are flexed we have assumed a similar or equal commission to the AXA Standard initial commission (6.25%) . Figures based on a male aged 50, investing in the default fund in a bond with an exit fee. It is calculated using charges. Most product wrappers have very similar charges The ‘benefits’ of product wrapper choice? Provider AXA Life Clerical Medical Friends Prov L&G Sterling Ass Pru Aegon SE Skandia Life Lincoln Product Easy Access My Normal Wealth Sol Bond Portfolio Bond Inv. Bond Inv Plan Est. Charge Inv. Bond Inv. Bond 10 year RIY (£100k) 1.2% 0.9% 1.1% 1.2% 1.1% 0.9% 0.9% 1.0% 1.0%
  • 8. If only it were that simple… <ul><li>Comparing costs have to make certain assumptions: </li></ul><ul><ul><li>size of portfolios overall and by wrapper / products </li></ul></ul><ul><ul><li>new money added </li></ul></ul><ul><ul><li>funds chosen </li></ul></ul><ul><ul><li>level of switching activity </li></ul></ul><ul><ul><li>length of time money invested </li></ul></ul><ul><ul><li>additional features. </li></ul></ul>19/01/10 The drive to build value Jan2010 <ul><li>Do we review the advice every time one or more of these factors changes? </li></ul><ul><li>Cost of time and restructuring if we do? </li></ul><ul><li>And what about platforms?..... </li></ul>
  • 9. Platforms: Generally 0.1 – 0.2% 19/01/10 The drive to build value Jan2010
  • 10. RDR impact on product market <ul><li>Transparency </li></ul><ul><li>Removal of product incentives </li></ul><ul><li>Homogeneity </li></ul><ul><li>Narrowing cost differentials </li></ul><ul><li>Reduced “value-add” in product research </li></ul>19/01/10 The drive to build value Jan2010
  • 11. Reduce association with product 19/01/10 The drive to build value Jan2010 Remuneration …
  • 12. Two clients: Each have £250k invested <ul><li>Client A </li></ul><ul><li>Earning £150k p.a. </li></ul><ul><li>Estate £2 million </li></ul><ul><li>Wants 2 visits & reports p.a. to their house </li></ul><ul><li>Adventurous investor </li></ul><ul><li>20 funds / investments </li></ul><ul><li>Discusses all aspects of financial affairs </li></ul><ul><li>Client B </li></ul><ul><li>Earning £50k pa. </li></ul><ul><li>Estate £1 million </li></ul><ul><li>Wants 1 visits & reports p.a. in your office </li></ul><ul><li>Cautious investor </li></ul><ul><li>10 funds / investments </li></ul><ul><li>Only discusses investments </li></ul>19/01/10 The drive to build value Jan2010 Both typically pay 0.5% (£1,250)
  • 13. Payment independent of product <ul><li>Is value… </li></ul><ul><li>directly and solely linked to FUM? </li></ul><ul><li>dependent on the sale of a product? </li></ul><ul><li>time related? </li></ul><ul><li>Impartiality – payment for advice & service </li></ul>19/01/10 The drive to build value Jan2010
  • 14. Agenda <ul><li>What do your clients consider value? </li></ul><ul><li>What determines real value? </li></ul><ul><li>Delivering that value </li></ul><ul><li>Effective deployment </li></ul><ul><li>Summary </li></ul><ul><li>Questions </li></ul>19/01/10 The drive to build value Jan2010
  • 15. What elements create value for clients? 19/01/10 The drive to build value Jan2010 Impartiality Accessibility Reduced administration time / paper Speed to act Speed & accuracy of info Tax Optimisation Ongoing review Investment strategy Plan / Strategy Goals Objectives <ul><ul><li>Security for Family </li></ul></ul><ul><ul><li>Sense of control </li></ul></ul><ul><ul><li>Peace of mind </li></ul></ul><ul><ul><li>Value for money </li></ul></ul>
  • 16. Agenda <ul><li>What do your clients consider value? </li></ul><ul><li>What determines real value? </li></ul><ul><li>Delivering that value </li></ul><ul><li>Effective deployment </li></ul><ul><li>Summary </li></ul><ul><li>Questions </li></ul>19/01/10 The drive to build value Jan2010
  • 17. Delivering that value 19/01/10 The drive to build value Jan2010 2. Advice <ul><li>Generic advice on product </li></ul><ul><li>Basic information provision </li></ul>Value dependent on experience of client. 3. Specialist Advice <ul><li>Ability to utilise knowledge </li></ul><ul><li>Highly technical / complex markets </li></ul><ul><li>Discretionary Fund Management </li></ul>Significant value to those clients in more sophisticated situations. 1. Transactional / Administration <ul><li>Product selection </li></ul><ul><li>Putting a policy in place </li></ul><ul><li>Providing valuations </li></ul><ul><li>Maintaining files & records </li></ul>Limited value in client’s mind. 4. Service / Relationship <ul><li>Delivering on promises </li></ul><ul><li>Strategic Financial Planning </li></ul><ul><li>Disciplined reviews </li></ul><ul><li>Knowing and understanding client </li></ul><ul><li>Trust, accessibility etc </li></ul>Highly valued by all clients.
  • 18. The enabler - automation 19/01/10 The drive to build value Jan2010 Paperless Investment Admin Mgt Back Office
  • 19. IFAs recognise positive impact of platforms 19/01/10 The drive to build value Jan2010 Source: The Platforum August 2009 Not right for all or not used effectively?
  • 20. Determining your platform strategy <ul><li>Single or multiple platforms? </li></ul><ul><li>Do you switch between platforms? </li></ul><ul><li>Systems and tools </li></ul><ul><li>Different charging structures </li></ul><ul><li>Justifying your selection </li></ul>19/01/10 The drive to build value Jan2010
  • 21. “ Predominantly” single platform approach <ul><li>To support: </li></ul><ul><li>Efficiency </li></ul><ul><li>Consistency </li></ul><ul><li>Streamlined systems and processes </li></ul><ul><li>Standard charging </li></ul><ul><li>Smarter monitoring and management </li></ul><ul><li>Overall value add for service / relationship based proposition </li></ul>19/01/10 The drive to build value Jan2010
  • 22. Time saving: Putting it all together 19/01/10 The drive to build value Jan2010 Time for value add Admin / Paper Ongoing enquiries New Money Switching Review Valuations Reconciliation Processing Research & Reasons Why Marketing Time for value add Admin / Paper Ongoing enquiries New Money Switching Review Valuations Reconciliation Processing Research & Reasons Why Marketing
  • 23. Agenda <ul><li>What do your clients consider value? </li></ul><ul><li>What determines real value? </li></ul><ul><li>Delivering that value </li></ul><ul><li>Effective deployment </li></ul><ul><li>Summary </li></ul><ul><li>Questions </li></ul>19/01/10 The drive to build value Jan2010
  • 24. Pricing / Proposition options 19/01/10 The drive to build value Jan2010 Value for money under duress Same Fee Increased Fee B. Reduced services <ul><li>½% adviser charge </li></ul><ul><li>No extra cost </li></ul><ul><li>Client gets less </li></ul>Reduced value for money C. Price Rise <ul><li>E.g. ½ to 1% adviser charge </li></ul><ul><li>Extra ½% cost </li></ul><ul><li>No change to services </li></ul>Reduced value for money D. “Value” Rise <ul><li>Introduce Platform </li></ul><ul><li>Platform charge e.g. ½% </li></ul><ul><li>½% adviser charge </li></ul><ul><li>Improved and more services </li></ul>Improved value for money A. Pressure on Profit <ul><li>½% adviser charge </li></ul><ul><li>No extra cost </li></ul><ul><li>Maintain services </li></ul>
  • 25. The “Value” rise <ul><li>Immediate access to current values </li></ul><ul><li>Consolidated view </li></ul><ul><li>Wider fund choice / investment options </li></ul><ul><li>Speed to move, withdraw or invest </li></ul><ul><li>Opportunity to reduce switch costs and set up charges </li></ul><ul><li>Improved tax management </li></ul><ul><li>Reduced drag costs on returns / no time out of market </li></ul><ul><li>Asset Allocation monitored & managed across all investments not just product by product </li></ul><ul><li>Time dedicated to clients’ strategic needs, concerns and objectives </li></ul><ul><li>Reduced paper / administration </li></ul><ul><li>WITHOUT A WRAP PLATFORM, HOW MUCH WOULD IT COST AN IFA FIRM TO DELIVER ALL THIS AND AT WHAT RISK? </li></ul>19/01/10 The drive to build value Jan2010
  • 26. Transition is not just a change of IT… 19/01/10 The drive to build value Jan2010 ... it’s a metamorphosis Where you want to be Skills / knowledge People Systems Structure Processes Segmentation Pricing Proposition Strategy Vision Where now?
  • 27. <ul><li>Thank You </li></ul><ul><li>Any questions? </li></ul>19/01/10 The drive to build value Jan2010 19/01/10
  • 28. 19/01/10 The drive to build value Jan2010 19/01/10 Elevate, PO Box 476, Bristol, BS32 4UY. Telephone: 0845 600 2399. AXA is a worldwide leader in financial protection and wealth management. In the UK, one of the AXA companies is AXA Portfolio Services Limited, which uses the Elevate trading style. AXA Portfolio Services Limited is authorised and regulated by the Financial Services Authority. It is a company limited by shares, registered in England No. 1128611. Registered office: 5 Old Broad Street, London, EC2N 1AD.  As part of our commitment to quality service, telephone calls may be recorded. This presentation is for professional financial advisers only. It should not be distributed to, or relied upon by, retail clients

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