building a digital foundation for wealth...

CEB Wealth Management

Building a Digital

Foundation for Wealth

Management

Improving the Client Experience

with Agile Client Onboarding

02 November 2016

Sponsored by

© 2016 CEB. All rights reserved 2

Roadmap for the Webinar

Advisors Are Also

Customers

Firms Need to

Become Agile

Increased Need

for Customer

Centricity

© 2016 CEB. All rights reserved. 3

Failing to Generate Deep Relationships

2%

Unsure

27%

One Specific

Aspect of

Financial

Situation

37%

A Few Areas

of Finances

33%

Entire

Financial

Situation

n = 420.

Source: CEB 2013 Customer Experience Survey.

Note: Pie does not equal 100% due to rounding.

50%

Majority 50%

Less Than

Majority

n = 44.

Source: CEB 2014 Advisory Experience Diagnostic.

Level of Guidance Received from Primary

Financial Advisor

Percentage of HNW Clients, Global

Percentage of Clients with a Majority of Their

Household Investable Assets at the Firm

Wealth Management Executive Assessment, Global


A More Crowded Field

Use of Financial Institutions for Personal Financial Guidance

Percentage of HNW Clients, Global, 2016

HNW Clients Consulting Four or More Financial Institutions for Personal Financial Guidance, by Age Cohort


n = 315.

Source: CEB 2016 HNW Client Experience Survey.

Percentage of HNW Clients

Consulting Two or More Financial

Institutions for Personal Financial

Guidance

69%

0%

15%

30% 28% 27%

12%

Gen Y Gen X Boomers

n = 315.



Questionable Loyalty to Firm

HNW Clients’ Likely Action if Their Primary Wealth Management Advisor Were to Leave His or Her Current Firm


HNW Clients’ Likelihood to Change their Primary Wealth Management Firm in the Next 12 Months


21% Somewhat Easy

32% Easy or Very Easy

7% Difficult or Very

Difficult 13%

Somewhat Difficult

27% Neither Easy or

Difficult

2% Almost Certain

5% Very Likely

16% Moderately Likely

26% Slightly Likely

51% Not at All Likely

n = 318.


n = 318.

Source: CEB 2016 HNW Client Experience Survey; Note: One-percent of HNW clients reported that they would stop working with a wealth management advisor.

n = 318.


Work with a New Advisor at

the Current Firm

Work with the Same

Advisor at a New Firm

Work with a New Advisor

at a New Firm

49% 30% 20%

HNW Clients’ Assessment of the Difficulty of Switching

Their Primary Wealth Management Providers



More Digital, Less Loyal

0%

35%

70%

26%

38%

50%

Clients Consulting Three or More Financial

Institutions for Personal Financial Guidancea

Average Client Wallet Share Held with

Primary Wealth Management Firm

n = 703.

Source: CEB 2016 Digital Experience Survey.

aClients were asked how many how many total financial institutions provide them with personal financial advice (e.g., investment advice, financial planning).

n = 703.


Low Low Medium Medium High High 0%

35%

70% 67%

59% 55%

Level of technology savviness is determined by the total number of devices an individual owns and the number of activities (e.g., “research new

products before I buy”) he or she regularly completes using a smartphone, tablet, or computer.

Technology Savviness Technology Savviness


A Digital World

Device Ownership

Percent of High-Net-Worth Individuals

n = 1,148.


31% 68%

77% 89%

Smartphone Laptop, notebook, or netbook

Tablet

Technology devices

that you wear


Challenging Incumbents

Source: CEB analysis.

versus

“We’ve become a commodity industry where each of us differentiates using a very high cost, hopefully very

high value-add distribution system. Every other industry where that’s been true in the last 20 years has

been “Amazoned.” I can’t see how that could happen to us — I can’t figure out how it would happen —

but I can’t imagine it not happening.”

Head of Wealth Management

North American Firm


Digital Demand on the Rise

HNW Clients’ Preference for Using the Online or Mobile Channel a to Conduct Each Interaction at Primary

Wealth Management Firm

Percentage of HNW Clients, Global, 2013 and 2016

n = 417 (2013), 356 (2016).

Source: CEB 2013 and 2016 HNW Client Experience Survey. aOther channel options were in person (face-to-face), over the phone, and through the mail or postal service.

56% 55%

0

40%

27% 26%

11%

68% 67%

57%

49%

41% 42%

24%

0%

35%

70%

AccessAccounts,

Products, andServices

Access Newsand Insights on

FinancialMarkets

Track ProgressToward My

Financial Goals

Trade Stocks,Bonds, Mutual

Funds, or OtherInvestments

PurchaseAdditionalAccounts,

Products, andServices

Get Help With aSimple QuestionAbout Personal

Finances

Obtain FinancialGuidance (e.g.,

RetirementPlanning)

2013

2016

N/A


Focusing on Client Centricity

Top Five Statements That Best Describe Firms’ Digitalization Strategya

Percent of Wealth Management Business Leaders

n = 61.

Source: CEB 2016 FS Business Executives Survey. aRespondents could select up to three statements from a list of nine.

“Simplicity is winning today. End clients are drowning in information and features, and they’re crying for

simplicity. They’re embracing streamlined, efficient simplicity in the digital environment.”

Senior Executive

North American Technology Solutions Provider

26%

31%

34%

34%

38%

0% 5% 10% 15% 20% 25% 30% 35% 40%

Delivering a Frictionless Customer Experience

Using Data and Analytics

Integrating Internal Systems/Processes

Providing Personalized Online Experiences

Improving Customer Access



Advisors Are

Also Customers

Firms Need to

Become Agile

Increased Need

for Customer

Centricity


Holistic High Performers Use More Tech

Technology Use by High and Core/Low Holistic Advisors

Percentage of Advisors at Each Performance Level, 2015

n = 653.

Source: CEB 2015 Advisor Competency Diagnostic.

Note: Core/Low and High Holistic Performers were determined by manager evaluations on six specific competencies focused on holistic advice.

Never Constantly

40%

20%

20%

High Holistic Advice Performance

Core/Low Holistic Advice Performance

Average Technology Use

Composite measurement

combining each advisor’s use

scores across all technologies

Distribution of Average

Technology Use Score by

Holistic Performance Group

Pe

rce

nta

ge o

f A

dvis

ors

Wit

hin

Ea

ch

Gro

up

Average Technology Use


Growth in Robo-Advice

Robo Advisors Proliferating

Source: Google, CEB Analysis.

Google Search Volume for “Robo Advisor”

Monthly, Indexed

“Big Banks Try to Beat

‘Robo Advisors’ by

Joining Them”

CNBC

“Robo Advisors Take on Wall Street”

Barrons

“Attack of the Robo Advisors”

FinancialPlanning.com

2013 2014 July 2016 2015 2016

Partial List of Established Firms Offering or Developing Robo Capabilities


Update HNW Digital with Robo Elements

Source: CEB Analysis.

Wealth Firms Robo Advisors

Intuitive, Digital Financial Planning

Tools Are Table Stakes

Integrated Planning

and Online Access

Incorporate Planning Capabilities on the

Portal

Provide Free Aggregation

for a Large User Base

Account

Aggregation

Add or Enhance Account

Aggregation Capabilities

Open and Fund Accounts Quickly

and Efficiently Rapid Onboarding Tap BPM, ECM, and e-Signature

Offer Real-time Reporting

on Simple Goals Real-Time Reporting

Refine Reporting Capabilities for

Online Access


Web Site Experience

Q: Overall, How Would You Rate the Quality of the Client Experience at Your Firm with Website and Client Portal

Capabilities?

Percentage of Wealth Management Executives Selecting “Very Good” or “Excellent”, 2016

n = 116.

Source: CEB 2017 Wealth Management Agenda Poll.

32%

35%

38%

41%

42%

42%

46%

46%

0% 25% 50%

Applicability of Online Capabilities to Interactions withAdvisors

Overall Quality of Online Experience

Usefulness of Online Capabilities in Making FinancialDecisions

Ease of Executing Transactions Online

Quality of Online Account Aggregation Capabilities

Quality of Financial Management Tools

Ease of Monitoring Investment Performance Online

Accuracy of Real-Time Reporting Online


New Model Drives Broader Advisor Technology Use

n = 653.


Percentage of Advisors Using Each Technology “Frequently” to “Constantly,” 2015

69%

57% 54% 53%

45%

39%

35%

29%

19%

42% 45%

49%

31% 29%

46%

17%

23%

12%

0%

35%

70%

CRM PortfolioManagement

ClientReporting

FinancialPlanning

ManagedAccount

Platforms

SecuritiesProcessing

TrustAccounting

ECM BPM

Solutions-Based Sales Model Transactions-Based Sales Model


Mixed Ratings for Technology Effectiveness

n = 203 (BPM); 201 (ECM); 214 (CRM); 202 (client reporting); 193 (trust accounting); 203 (managed account platforms);

218 (financial planning); 205 (portfolio management); 190 (securities processing).


.

Percentage of Market Managers Indicating Technology is “Effective” or “Very Effective,” 2015

20%

23%

29%

33%

39% 41%

46% 47%

53%

0%

30%

60%

BPM ECM CRM ClientReporting

TrustAccounting

ManagedAccount

Platforms

FinancialPlanning

PortfolioManagement

SecuritiesProcessing


Regulators Add an Additional Layer of Complexity

Key Regulations Directly or Indirectly Impacting Wealth Management Firms Worldwide

RDR

Retail

Distribution

Review

(UK Only) Dodd-Frank

FOFA

Future of

Financial

Advice

CRM2

Client

Relationship

Model Phase Two

MIFID (II)

Markets in

Financial

Instruments

Directive

DOL

Fiduciary

Standard

2006… 2010 2013 2016… 2016 2018

Scope

Australia Canada EMEA


US


Automation Technology Frees Up Valuable Advisor Time


.

Integration of Automation Technology to Focus on Advisor Capacity on Advice Delivery

Illustrative

High

Low

Time

Share

of T

ota

l A

dvis

or

Tim

e S

pent on E

ach

Type o

f A

ctivity

Advisor time spend on

services and compliance

activities continues to grow,

leaving less capacity for

advice delivery.

Automation technologies

dramatically decrease

advisor time spend such

as service and

compliance while

increasing capacity for

advice delivery.



Advisors Are Also

Customers

Firms Need to

Become Agile

Increased Need

for Customer

Centricity


The Role of Technology Has Changed

CEO Ranking of Technology as a Business Driver

6th 1st

Personal Channels Multichannel

Digital Channels

“Personal Only” Customer Digital Usage

Percentage of “Personal-Only” Customers,

Global, 2015

88%

Own a

Smartphone

or Tablet

90%

Use Social

Media n = 1,146.

Source: CEB 2015 Customer Experience Survey.

n = 1,653. Source: CEB 2013 Customer Experience Survey.

Channel Preferences

Percentage of Banking Customers in Each Category,

North America, 2015

23% 23% 55%

“BBVA will be a software company in the

future.”

Francisco Gonzalez CEO, BBVA

2004 2013



Onboarding a Top Priority

Importance of Technology Priorities to Company’s Business Strategy in Next 6–12 Months

Percentage of Responses, 2015

n = 26.

Source: CEB 2015 Wealth Management Technology Agenda Poll.

Note: Respondents ranked importance on a 5-point scale (5 = Extremely Important and 1 = Not at All Important). The graph shows the percentage of respondents

who selected importance of that issue as 4 or 5 on the scale.

23%

23%

31%

38%

42%

69%

69%

69%

73%

73%

81%

85%

88%

0% 50% 100%

Developing/Enhancing the Vendor Oversight Process

Enhancing Social Media Compliance, Engagement, and Adoption

Responding to Disruptive Competition

Applying Data to Actionable Analytics

Adopting Cloud Technology and Solutions

Enhancing Digital Channels to Complement the Advisory Experience

Aggregating Client Data from Inside and Outside Your Institution

Developing Mobile Technology Solution/Platform for Advisors

Assessing/Defining Strategies for Core Platforms

Integrating Core Advisor Desktop Components for Productivity

Upgrading Client Reporting Content and Access

Responding Strategically to Industry Regulation

Improving Client Onboarding from Front to Back Office


Room for Confidence Improvement

Confidence in Ability to Execute Technology Priorities in Next 6–12 Months

Percentage of Responses, 2015

n = 26.

Source: CEB 2015 Wealth Management Technology Agenda Poll.

Note: Respondents ranked importance on a 5-point scale (5 = Extremely Important and 1 = Not at All Important). The graph shows the percentage of respondents

who selected importance of that issue as 4 or 5 on the scale.

27%

46%

46%

46%

54%

58%

62%

62%

65%

65%

65%

69%

77%

0% 40% 80%

Enhancing Social Media Compliance, Engagement, and Adoption

Applying Data to Actionable Analytics

Adopting Cloud Technology and Solutions

Aggregating Client Data from Inside and Outside Your Institution

Responding to Disruptive Competition

Integrating Core Advisor Desktop Components for Productivity

Developing/Enhancing the Vendor Oversight Process

Upgrading Client Reporting Content and Access

Enhancing Digital Channels to Complement the Advisory Experience

Developing Mobile Technology Solution/Platform for Advisors

Improving Client Onboarding from Front to Back Office

Assessing/Defining Strategies for Core Platforms

Responding Strategically to Industry Regulation


Clients Setting a New Pace of Rapid Change

Drivers of Growing Importance of Technology Project Speed

Percent of FS Firms, 2015

23%

18% 17%

16% 15%

11%

0%

5%

10%

15%

20%

25%

Quickly ShiftingClient Preferences

Innovation fromCompetitors

Increase inRegulation

Fast EvolvingTechnologies

IncreasingBusinessDemands

Reporting andAnalytics Needs

n = 645.

Source: CEB 2015 FSI Technology Survey.

“We spent two million dollars with _______ Consulting to develop a technology roadmap. What we got for that investment

was one clear lesson—don’t do it. Client demand changes too fast. Technology changes too fast. We’ve probably never

heard of the technology that will be at the heart of our client service platform five years from now.

All we can do is respond faster to keep up.”

Head of Wealth Management

North American Financial Institution

Client Demand Change

Competitive Change

Reporting and Internal Change


The Standard Technology Management Process

Technology Value Delivery Path Key Workflows Listed Under Each Stage

Idea Value

Planning

Approve Resource Design

Implementation

Develop Support

■ Assess project proposals

and business cases

■ Manage technology

inventory

■ Manage security

operations

■ Evaluate new

technologies

■ Manage technology

lifecycle

■ Manage the project

prioritization process

■ Manage the IT budget

■ Manage and forecast

project resources

■ Gather business

requirements

■ Assess current state IT

environment

■ Design the solution

■ (Re-)design business

processes and workflows

associated with the

solution

■ Develop and deploy RFPs

to vendors

■ Select vendors

■ Manage projects

■ Build applications

■ Integrate applications

■ Manage quality assurance

and testing

■ Manage security

operations

■ Manage and refresh

systems and technology

■ Manage IT vendors

■ Manage third-party risks

■ Drive reuse and standards

adherence

■ Manage employee

adoption

■ Manage user awareness

■ Manage organizational

change

■ Measure IT performance

(govern IT services)



Business Lines Bypassing Planning

48% Yes

Technology Spending Owned by Business Partners, in addition to the CIO’s Budget

Business Partner Willingness to Trade off Cost,

Quality, and/or Functionality for Speed

Percentage of Business Partners

52% No

n = 3,681 business partners across 17 business functions

and five seniority levels.

Source: CEB 2015 IT Clock Speed Survey.

Source: CEB Annual Budget Benchmarking; CEB Functional Budget Benchmarking; CEB analysis.

0

0.7

0

0.7

1.4

IT Budget Business-led Technology Spending

0.4x

1x

17

85% Planning Stall Points

Breakdown of Top 20 Technology Project Stall Points

By Rank

15% Implementation

Stall Points

n = 497 respondents from 294 organizations.

Source: CEB 2015 IT Clock Speed Survey.

Methodology: CEB surveyed IT staff in almost 300 organizations to determine the barriers to technology

speed across 47 steps in 11 categories, such as ideation, approval, design, development, and

integration.


The New Approach: Agile Planning

17

0

30

60

The Impact of Implementation and Planning as Components of the Speed to Value Curve

Indexed Values, FS Firms

n = 269.

Source: CEB 2015 FSI Technology Survey.

Methodology: CEB grouped a series of approaches gathered from technology executive survey respondents into planning and implementation. CEB then

modeled the impact of these grouped approaches using a regression analysis with controls.

To

tal

Sp

ee

d t

o V

alu

e

Executives who focus on

planning realize 2.5 times

greater impact for the same

project speed.

0 100

Component Speed

Planning Implementation

50

17

43


Digital Transformation Pitfalls

17

Average Advisor

Competency Rating

# 1. Being

Accessible

to Clients

# 43. Engaging

Clients and

Prospects Through

Multiple Channels

Executive Viewpoint

“I Have a Clear

Understanding of

How Digitalization

Applies to My

Organization.” 35%

“Most of Our

Employees

Understand Our

Approach to

Digitalization.” 20%

Executive Viewpoint

11% “Our Client-Facing

Technology to Enhance

the Advisory Experience is

Effective.”

n = 209 FSI business leaders.

Source: CEB 2016 Digital Enterprise

Survey.

n = 44 firms.

Source: CEB 2014 Advisory Experience

Diagnostic.

n = 653 advisors.

Source: CEB 2015 Advisor Competency

Diagnostic.

Strategy Capability Delivery


Key Takeaways


Clients are becoming less loyal, with most wealth clients having relationships with

multiple wealth management firms. What makes matters worse is that clients are

becoming more digital, and the more digital the client, the less loyal they become, so

firms have to focus on improving the digital experience by becoming customer centric.

Advisors are customers too, however, and they are also becoming much more

technologically savvy. In order to arm them with the tools necessary to capitalize on

what little time they have to meet client needs in an ever more complex environment,

firms need to quickly provide them with a digital experience that is going to meet these

needs.

Firms realize this need and have prioritized onboarding to compete with emerging

threats and comply with changing regulations, but they may be focused too much on

either long term projects or limited implementation. By involving the right partners early

in the process and by using agile solutions firms can approach technology in an

iterative manner and thus use actual data to constantly improve their offering to clients

and advisors.

Building a Digital Foundation for Wealth Management: Improving the Client Experience with Agile Onboarding

Agreement Express | Onboarding Automation Software

MIKE GARDNER CEO – Agreement Express

31

Mike Gardner is the CEO of Agreement

Express, the leading customer onboarding

platform for the financial services industry.

As a 20-year veteran of the software industry,

Mike has evolved Agreement Express into a

platform trusted by top institutions such as

National Bank of Canada, Global Payments,

Questrade, M&T Bank, and many more.

Agreement Express | Onboarding Automation Software 32 32

What Is Client Onboarding?

ONBOARDING PROCESS

SALES & MARKETING

Data Capture

QA & Review

Compliance & Analysis

Processing & Approval

SYSTEM OF RECORD


Onboarding affects every area of

the Client/Advisor experience.

33

QA & Review

Compliance & Analysis

Processing & Approval

33


Let’s talk about onboarding.

34

“[Onboarding] is primarily task-driven, paper-based, and administrative in nature, which results in advisors and support teams wasting valuable time on highly manual tasks such as repetitive entry of client data.” — Accenture

5


POLL: How are you planning on solving the onboarding problem?

35

A) Scoping a BPM project

B) Focusing on one piece (e.g., New Account Wizard)

C) Still in the research phase

D) We’re happy with our onboarding process

6

Agreement Express | Onboarding Automation Software 36

There are 2 big problems with client

onboarding projects.

7


1) Narrowing the scope of your project

8

New Account Opening

You Can’t Solve Just One Part of the Problem Use-Case Centric Transformation

9

New Account Opening

Account Transfers

Private Placements

KYC Updates

… And Everything

Else

You Can’t Solve Just One Part of the Problem Client/Advisor-Centric Transformation

10


2) Betting on a massive BPM project

11


The present is hard. The future is impossible.

You can’t scope your project to predict ALL the exceptions

You can’t perfectly predict all the ways your advisors and clients will behave

12


Predicting Desire Paths Is Hard

13


Large BPM Projects: • Expensive

• Slow

• Rigid

• High Risk

15


Agile Client Onboarding


16


Meaningfully transforms the whole experience

Gives you value from day one

Generates data that tells you where you need to

iterate and develop


Agile transformation is the only practical way to impact the whole experience.


Rules for Building an Agile Framework

19

1) Determine who you want to impact

2) Cover the whole experience (or as much as possible)

3) Start and make a difference today, not next year

4) Iterate based on real data (discover the desire paths)

19


Who Do You Want to Impact?

49

To define the problem, start by determining who is going to

be the center of your impact.

Clients, advisors, back office? Whichever it is, you need to

meaningfully transform their whole experience.

20


New Account Opening

Account Transfers

Private Placements

KYC Updates

…And Everything

Else

How You View the Client/Advisor Experience

21


The Experience

How Your Client/Advisor Views It

22


Make an Impact Today, Not Next Year

52

Get out of the software business

Choose software that allows you to activate today

Complex integrations and workflow processes

aren’t as urgent as you think

23


Once you start using agile onboarding software,

you need to make continual iterations using real

business data, not speculation.

53 24

If you’re not even in the race, you’re just

falling further behind.


Agile Onboarding with Agreement Express

56

“Day one” functionality

Flexibility to capture the stuff you can’t predict

Covering the “whole experience”

Ability to observe data, and iterate

27


Day One Functionality

Keep all your

transactions + cases in

one central, searchable

place

28



Drag and drop any type

of file you need

29



Progress all types of

applications from the

desktop, even paper scans

Drag and drop “ink”

digital signature

30


Covering the Whole Experience

Initiate “more” of the experience

31


Covering the Whole Experience

Initiate and complete

everything from KYC

updates to opening new

accounts, to account

transfers

32


Discover the Desire Paths

Full, automated audit

trail of every client

onboarding step

33


Iterate Using Data

34


The data that says “Incorrect SSN”

is the most common NIGO culprit

Iterate Using Data

35


Configure “Double Entry” to

eliminate the SSN problem

37

What about my forms?

What about my data?

What about legacy system integration?

These questions are all about designing the “perfect path”. This is how projects get

delayed for months or years.


Agile client onboarding is about setting the direction today. Build the perfect path as you go.


You can make meaningful digital transformation today with agile client onboarding.

44

Questions?

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