Key trends in financial planning


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A financial planning system should have the capability to allow capture of financial and non financial data of the customer, administer risk profiling, capture and plan for different goals and enable portfolio management of the client.

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Key trends in financial planning

  1. 1. Financial Planning ServicesUniversal Banking Solution System Integration Consulting Business Process Outsourcing
  2. 2. Traditionally, banks were defined as financial in moving from transaction-based bankinginstitutions for safe custody, loan, exchange or model to a combination of transaction &issue of money for the extension of credit and relationship based fee model. A strong advisoryfor facilitating transmission of funds. While relationship with the clients also increases thethese remain as the core services offered, a host transaction fee earned from each customer onof additional services have come under the ambit account of increased business through the bank.of revenue generating avenues for banks. Key Trends in Financial PlanningUnder the wealth management space, banksextended their business by offering bank-owned Alternate Channelsand third party products to their clients. Thedemand for advisory services has also risen A financial planning system should have thein recent times post the global financial crisis capability to allow capture of financial and nonas customers seek investment guidance in financial data of the customer, administer riskdifficult times. Today, financial planning services profiling, capture and plan for different goalsare offered by most banks in the wealth and enable portfolio management of the domain. This extension of banking Financial planning process is a consultativeservices makes logical sense since banks aim process between a certified financial planningat providing holistic solutions to all financial advisor and the client. Once the financial planneeds of their customers. is drawn out and decided between the parties, it is tracked by the advisor for any deviations.How Offering Financial Planning Services is While face to face meetings might be requiredBeneficial to Banks from time to time, the banks are encouraging customers to use non-branch channels to meetStronger Client-Advisor Relationship their banking and wealth management needs.A strong financial planning platform enables Online Financial Advisory Servicesthe bank in building stronger relationships withtheir client. Financial planning involves a deep Consumers value online banking features thatunderstanding of the clients’ asset, liabilities, address their communication needs and offerincomes, expenses, risk profile and goals. A personalized experiences. Providing onlinestrong client-bank relationship ensures loyalty, access to clients to their financial planningas the customer is less likely to switch banks account is an important requirement of aand start the financial planning relationship afresh. financial planning system. This enables the client to track their investment and financialCustomized Services to the Clients goals independently. This can be extended to providing an advisor interface to the clients.Banks sit on a wealth of customer data which The client interaction with the advisor can becan be mined to determine what products can provided through audio/video support. Accessbe offered to clients. A sound understanding of to research reports, videos of financial expertthe customers’ financials enables the bank to seminars/talks can also be provided to the clientscustomize their offering. In-depth knowledge of through their online financial planning account.each client’s needs and aspirations facilitateseffective customer segmentation resulting in Online service channels aim at bringing thetargeted and structured client communication. branch experience to online banking. Banks canBanks can hence realize greater revenue maximize their revenue earning potential bythrough targeted campaigns based on the tapping into mass affluent client base. Whilecustomer requirements. High Net Worth and Ultra High Net Worth Individuals require highly customized solutionsIncrease in Revenue Share per Client and personalized financial advice, the financial planning needs of the mass affluent customer canBanks earn revenues from transaction fee as be effectively met through online financialwell as advisory fee. Banks have made an effort advisory services offered by banks. Financial Planning Services
  3. 3. Mobile Financial Planning Applications for Clients invest, save, and borrow money. Belsky and Gilovich (1999)There has been a strong growth in the use ofmobile applications by smart phone users Behavioral finance is gaining significantacross the globe. However, introduction of importance with bankers and wealth applications in the financial planning Advisors can use aspects of this new andand wealth management space has been evolving discipline to gain a deeper understandingslow owing to various reasons. Ensuring of the client before offering investment advice.adequate level of security is one of the key Understanding the financial goals of clients ischallenges for firms while introducing mobile a key element in creation of the financial plan.apps for clients. Financial planning and wealth It is essential for the advisor to understandmanagement firms are however realizing the the emotions behind the goals to effectivelypotential of apps in engaging clients and offer investment advice. Applying principals ofoffering a more meaningful experience. Clients behavioral finance to financial planning can helpare also demanding new communication create strong and healthy advisory relationshipschannels, more information and ready access to with clients.their accounts. Mobile apps in the financialplanning domain would enable clients to track Banks offering advisory services as part of theirtheir portfolios, goals, provide access to research wealth management division can create longreports, market news etc. lasting relations with clients leading to increased revenue realization per customer. Banks needMobile Financial Planning Applications for Advisors to adopt new technology in this domain in order to offer financial planning solutions which areAccess to business applications through relevant to their clients. The need of the hour istheir mobile devices is a new trend gaining to equip the financial advisors with the tools,significance in todays’ technology driven world. applications and knowledge which wouldMobile financial planning apps enable the enable them to service their clients effectively.advisor to access the same functionality on the Enabling clients to communicate and interactgo which can be accessed while in office. with the advisors using new and alternateThis could include access to client accounts, channels would also strengthen their financialinteracting with clients etc. planning offering.Behavioral Finance AuthorBehavioral economics combines the twin Priyanka Diwandisciplines of psychology and economics to Consultant – Finacleexplain why and how people make seemingly Infosys Limitedirrational or illogical decisions when they spend, Financial Planning Services