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Lwm consultancy 2015


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Unique service for Financial Planners offering a high quality investment solution at a fraction of the cost of other solutions whilst maintaining your identity

Published in: Economy & Finance, Business
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Lwm consultancy 2015

  1. 1. W H A T D O E S T H E F U T U R E H O L D … . . Standing out from the crowd
  2. 2. Overview
  3. 3. Demographics are changing  Western population growing by less than 1% a year  Average age 40 to 45  Summary:  Aging and slowing population  Markets are maturing and burdened by debt  New generation coming through have less money and more debt but want the same retirement as their predecessors
  4. 4. The market  54% of the population have no savings or investments, this will increase  Only 22% of the population are “active” risk based investors in the UK  Routes to investing:  3.4 million pure self-directed investors  5.4 million both self-directed and advised  1.5 million entirely advised
  5. 5. The market  Self-directed market, B2B2C* and phone based advice will take 50% of the market in the future  The number and availability of advisers is set to shrink  But:  80% of self-directed investors are not active, and are not interested in investments  Investors want advice but don’t want to pay for it, creating a perception that fees will be squeezed *Self-directed offering sitting alongside advice model
  6. 6. Where now for the advice model?
  7. 7. Overview of the advice model  Greater moves towards a more professional vocation similar to the US model  Big emphasis on financial planning, maps and goals  But….there are challenges:  Everyone does financial planning IT IS JUST A COMMODITY  The investment strategy delivers the goals however many financial planners do not own the proposition  Cost is becoming a battle ground where people don’t understand the value of financial planning
  8. 8. Investment strategies “Over 50% of financial planners outsource their investment strategy……this will increase”
  9. 9. What does this tell us?  Outsourcing is being used to reduce the pressures of running a compliant business with the audit trail required to run an investment strategy  Advisers are not reducing fees to reflect outsourcing, meaning the cost to clients is going up  As more outsource, there is going to be an acceleration in consolidation between investment solution providers meaning the world becomes dominated by fewer, bigger brands  More and more advisers are no longer making the investment decisions which drive the delivery of client goals
  10. 10. Reversing the trend
  11. 11. Reversing the trend Financial planners want to own their own proposition but cost and compliance hinders them. Outsourcing seems the perfect solution. However:  Financial planners are starting to realise they are no longer in control of the whole client proposition  The client losses out as an extra layer of fees is built into the proposition  And ultimately as financial planning is recognised as a commodity, so will the investment strategy
  12. 12. Costs and identity Costs:  A DFM solution can cost up to 1% p.a.  There could be a VAT liability in addition to this fee “the total cost of investment outsourcing can cost the client in excess of 3% p.a.”
  13. 13. Costs and identity Identity:  DFM & other solutions simply do not reflect the identity of the business  To “add-value” the investment solution must be seen to reflect the adviser’s business “outsourcing of the investment solution in its current form does not reflect the business and is not controlled by the financial planner”
  14. 14. Costs and identity  Reality:  Financial planners are still trying to charge the same fees but using outsourcing to reduce their costs….meaning the client pays more for no perceived benefit  Clients are now seeing this much more and starting to demand lower fees to reflect this outsourcing  The end result is that margins are squeezed and will get squeezed further unless financial planners take control of their investment strategy
  15. 15. Solutions and building blocks  How we look at financial planning needs to change  Financial planning is about road maps and accepting paths change  Financial planning is about taking responsibility for the engine that drives the client along the path  Financial planning is about having a level head when the rest of the world is going crazy
  16. 16. The new world
  17. 17. Being different New solutions are coming out all the time…….  They are based around the past, and don’t consider the future  They don’t help with the aspect of time and identity, identity is crucial  In summary what is being offered is no different to what is already out there, it just has different packaging
  18. 18. Until now……
  19. 19. Being different Consider an outsource solution which:  Enables a financial planner to retain their identity by delivering a solution which is their solution  Costs considerable less than a DFM  Provides all the compliance support needed to run the investment solution  Provides a comprehensive communication package including management of website and client updates
  20. 20. Being different Its not been done before, until now. LWM Consultancy offers………………
  21. 21. Being different  Provision of a high quality investment solution  Provision of the fund analysis, compliance back up and investment committee notes to deliver the solution  Information on the structure and rational of the investment solutions so that the financial planner can explain to clients about is what is being done and why  A solution at a fraction of the cost of the DFM service making it far more likely that clients perceive “added value” both from their advisor and from the performance of their investments
  22. 22. Key benefits at a glance….  Cost reduction  Retention of identity  Focus on core competence  Access to portfolio management  Communication strategy
  23. 23. The next step
  24. 24. Next step Contact us: George Ladds, Head of Operations, 0117 370 2494 or Paul Berry, Director, 0117 370 2490 or