A webinar presented by Santi Burridge, Managing Director of Implemented Portfolios. Santi covers the following during his presentation: • What can Australian advisers learn from global trends in financial advice? • How technology and robo-advice is changing the US market • Understanding the growth in ETFs and Managed Accounts • What successful advisers focus on • What do clients really value?

1. Global trends in financial advice and
investment
netwealth Educational Series

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Where the ball is going:
What Aussie advisers can learn
from Global Trends in Financial Advice
Santi Burridge
MD and Co-Founder
Implemented Portfolios
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Important information
This information is dated February 2015, has been prepared by Implemented Portfolios ABN 36
141 881 147. AFSL Number 345143 and issued by netwealth Investments Limited (netwealth),
ABN 85 090 569 109, AFSL 230975. It contains factual information and general financial
product advice only and has been prepared without taking into account your individual
objectives, financial situation or needs. The information provided is not intended to be a
substitute for professional financial product advice and you should determine its
appropriateness having regard to your particular circumstances. The relevant disclosure
document should be obtained from netwealth and considered before deciding whether to
acquire, dispose of, or to continue to hold, an investment in any netwealth product.
While all care has been taken in the preparation of this information (using sources believed to
be reliable and accurate at the time of writing), no person, including netwealth, or any other
member of the netwealth group of companies, accepts responsibility for any loss suffered by
any person arising from reliance on this information.
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What can Australian advisers learn from global
trends in financial advice?
How technology and robo-advice is changing the
US market
Understanding the growth in ETFs and Managed
Accounts
What successful advisers focus on
What do clients really value?
Focus of todays presentation
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Why?
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6. HEADING GOES HEREHEADING GOES HEREGlobal Trends in Advice
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Global Trends in Advice

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Advice
Significant trend to objectives based FP
Realisation performance based FP very
dangerous
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Global Trends in Advice

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Platform
One client centric platform
Evolving functionality and service
proposition
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Global Trends in Advice

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The Age of the Consumer is here
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Global Trends in Advice

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Started in 2011
$1.8B in FUA at January 2015
Annual fee 0.25%
Active Asset Allocation
100% ETFs
One of the things that Wealthfront has been able to do with relative ease is create trust among
users.
“It takes a long time to establish trust, but once you create this, people don’t leave. Especially with
finances, people want to sleep well at night and know their money is being managed well”.
Mike Volpi, Index Ventures
One of the things that Wealthfront has been able to do with relative ease is create trust among
users.
“It takes a long time to establish trust, but once you create this, people don’t leave. Especially with
finances, people want to sleep well at night and know their money is being managed well”.
Mike Volpi, Index Ventures
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Democratising Investments & Advice

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Schwab ‘Intelligent Portfolios’
“We are fast at work on what we believe will be a ground-breaking
and market-leading introduction of an online advisory solution”
Walt W Bettinger
CEO of Charles Schwab
(largest advisor business in the US)
Due to launch in the first quarter of 2015
It’s free
All-ETF portfolios will tap into some 20 global asset classes
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Democratising Investments & Advice

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Look at Vanguard!
Top 4 Insto in Australia building one now (plus a mid tier)
Pershing Advisor Solutions
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Democratising Investments & Advice

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Control and Liquidity
Transparency
Active Asset Allocation not Active Investment
Redefining performance => the investor’s objectives
(not a meaningless sector benchmark)
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Key Themes & Trends - USA

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Growth in ETFs
• What are they?
• ETFs to be the largest market segment this year
Growth of ETF Strategists
• 2008 – 25 managers and $5.8bn assets
• 2015 - estimated $120bn
• 800% growth since 2008
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Key Themes & Trends in ETFs - USA

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Cerulli Associates estimate the US market to be
valued at $4 trillion by the close of 2015
Under the Managed Account umbrella:
• IMA – full discretion around portfolio customisation,
tax optimisation, implementation and remodelling
• SMA – cut down version of an IMA
• UMA – it’s a platform
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Key Themes & Trends in
Managed Accounts- USA

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The Age of the Consumer

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Democratising Client Engagement

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KISS
Engagement
• 70% of time on client-facing activities
Asset Gathering – not Asset Managing
Redefining investment value towards Risk Management
(beta)
Marketing – finding the niche and executing
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What successful Advisers focus on

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What successful Advisers focus on

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Independent Advice is King
Democratisation allowing a thriving independent market
Fund and stock picking business models losing viability
“Australia’s advice landscape is a shame”
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The Rise of the Independent

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Failed models
Mutual fund and platform revenue sharing
Products/vehicles being sold instead of investment constructed
for clients
Investment News / Moss Adams Research 2010 / Envestnet
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What hasn’t worked

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Shift from professional ‘sellers’ to professional ‘buyers’
Massive increase in consumer direct propositions
The whole industry is in a fight to win over the consumer
rather than the traditional ‘supply chain’
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Key Themes & Trends - UK

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Recognition that quality is critical to
success from consumer’s perspective
Substantial increase in the use of ETFs
Active managers now under considerable pricing pressure
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Key Themes & Trends - UK

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The rise of the D-C…..Robo Advisor
BNY Mellon – Advisors are substantially underestimating the
threat from D-C
Nearly every major is building one and bypassing the
adviser
No reason to believe the same will not happen here
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Key Themes & Trends - UK

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Where is an adviser’s expertise?
Where should they focus their time and
resources?
What do clients actually value?
The next wave of Financial Planning
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Questioning Value Proposition

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What practice are advisers trying to be best at?
Asset
Allocation
Asset
Allocation
Portfolio
Construction
Portfolio
Construction
Trading and
Execution
Trading and
Execution
Portfolio
Rebalancing
Portfolio
Rebalancing
Security
Research
Security
Research
Managed
Fund
Research
Managed
Fund
Research
EconomistEconomist
Portfolio
Administration
Portfolio
Administration
Communication
& Commentary
Communication
& Commentary
Corporate
Actions
Corporate
Actions
Asset
Consultant
Asset
Consultant
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Questioning Value Proposition

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What practice are advisers trying to be best at?
Asset
Allocation
Asset
Allocation
Portfolio
Construction
Portfolio
Construction
Trading and
Execution
Trading and
Execution
Portfolio
Rebalancing
Portfolio
Rebalancing
Security
Research
Security
Research
Managed
Fund
Research
Managed
Fund
Research
EconomistEconomist
Portfolio
Administration
Portfolio
Administration
Communication
& Commentary
Communication
& Commentary
Corporate
Actions
Corporate
Actions
Asset
Consultant
Asset
ConsultantLife Insurance
& Risk
Management
Life Insurance
& Risk
Management
Estate
Planning
Estate
Planning
Tax PlanningTax Planning
Client
Reviews
Client
Reviews
Retirement
Planning
Retirement
Planning
Corporate
Advice
Key Person
Corporate
Advice
Key Person
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Questioning Value Proposition

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What practice are advisers trying to be best at?
Asset
Allocation
Asset
Allocation
Portfolio
Construction
Portfolio
Construction
Trading and
Execution
Trading and
Execution
Portfolio
Rebalancing
Portfolio
Rebalancing
Security
Research
Security
Research
Managed
Fund
Research
Managed
Fund
Research
EconomistEconomist
Portfolio
Administration
Portfolio
Administration
Communication
& Commentary
Communication
& Commentary
Corporate
Actions
Corporate
Actions
Asset
Consultant
Asset
ConsultantLife Insurance
& Risk
Management
Life Insurance
& Risk
Management
Estate
Planning
Estate
Planning
Tax PlanningTax Planning
Client
Reviews
Client
Reviews
Retirement
Planning
Retirement
Planning
Corporate
Advice
Key Person
Corporate
Advice
Key Person
Business
Owner
Business
Owner
Company
Director
Company
Director
HR ManagerHR Manager
Sales and
Marketing
Sales and
Marketing
NetworkingNetworking
Succession
Planning /
Exit Strategy
Succession
Planning /
Exit Strategy
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Questioning Value Proposition

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Why Not?
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For OwnersFor Advisers

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Goals-Based Financial Planning Source: SEI
• Move away from things you can’t control
Hone Your Value Proposition
• Move beyond your 4 walls and geography
Operationalise FP
•Move away from asset management towards ways of tracking goals
and objectives
Assess your fee structure
•Differentiate your services and break down how you charge
Get technology to work for you
•Capture the mobile moment
•CRM at the core
Outsource
•Everything except your client relationship and value proposition
•Focus exclusively on the human connection to differentiate your
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The next wave of Financial Planning

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Challenge yourself
Embrace the change that is already here
Partner with like-minded firms and services
Strongly consider independence
Call to Action

33. netwealth Educational Series
Thank you.
Please direct any questions to contact@netwealth.com.au