Business Case PlaybookA blueprint to build a business case for improving advice delivery

Step Example

1Vision

Define the Vision • Evolve investment advice delivery process to improve outcomes for the organization, its investment professionals, and clients

Promote Business Beliefs • Increased portfolio manager (PM) capacity can help drive significant assets under management (AUM) growth and commensurate revenue growth

• Increased capacity creates opportunity for PM behavior modification and improved sales effectiveness

• Enhanced platform enables broader implementation of firm’s investment strategy and improves the client experience

• An integrated investment platform solution increases efficiency and reduces operational and business risks

Align to Strategy • Improved profitability (increased revenue-AUM, reduced expenses)

• Market leadership/positioning

• Improve risk management and operational efficiency

• Employee productivity/culture/connection to mission

• Client satisfaction

2Evaluate

Assess the Situation • Evaluate the current environment vs. desired outcomes for your people, key investment processes, and technology

• Develop metrics for key stakeholders

– Organization

– Investment professional

– Clients

Build the Business Case • Modeling framework/inputs (data collection, assumptions, lines of business)

• Modeling outputs (executive summary, multi-year analysis)

• Review and make adjustments

• Establish metrics and measurement vs. goals and objectives

3Decide

Validate Results • Validate results vs. vision, business beliefs and strategy metrics

• Quantitative and qualitative assessments

• Present to decision makers with conviction

Take Appropriate Actions • Go /no go/revisit

• Ready organization for forward progress

• Planning, budgeting, timing

Assessment: Representative ApproachThe following is a representative approach to develop a business case.

Wealth management represents a significant growth opportunity for many financial services organizations. It also represents a potential financial challenge for firms not equipped to deal with investor demands, the evolving regulatory environment, talent acquisition pressures, and productivity enhancers. This business case playbook is designed to guide senior wealth management leaders to think about the following questions more formally and to quantify the business case for making a change:

• What do you need to improve productivity so you can do more with less or the same? • What do you need to deliver a consistent value proposition and your firm’s best thinking around portfolio construction advice

and fulfillment?• What are successful firms doing to leverage advanced technology and unified managed accounts to address these challenges

head on, making the necessary adjustments to their operating models?• What are firms doing to provide their teams with the capabilities and transition management support they need to embrace a

new or evolved business model?

2 Business Case Playbook

Step Example

1Vision

Define the Vision

Promote Business Beliefs

Align to Strategy

2Evaluate

Assess the Situation

Build the Business Case

3Decide

Validate Results

Take Appropriate Actions

Assessment: Your Organization’s ApproachUse the following section to document your organization’s responses.

Business Case Playbook 3

Category Current Environment Desired Evolution

People

Portfolio Managers

Investment Strategy

Client Service

Business Development

Support Teams

Other:

Process

Investment Strategy

Portfolio Construction

Trading/Rebalancing

Tax/Restriction Management

Client Advisory Workflow

Sales/Business Development

Relationship Management

Technology

Profiling/Risk Tolerance Questionnaire

Portfolio Construction

Research/Analytics

Proposal/IPS Generation

Trading/Portfolio Management

Model Management

Tax Management/Optimization

Trade Execution

Client Management Tools

Performance Reporting

Trust Accounting

Compliance and Management Reporting

Other

Evaluate: Assess The Situation—People/Process/TechnologyUse the following table as a guide to analyze your organization’s current environment and desired evolution related to people, investment process, and technology. The exercise will be useful when modeling and reviewing the output of the business case.

Notes

4 Business Case Playbook

Stakeholders Key Metrics

Example: Improve profitability

Example: Increase the number of relationships managed

Example: Improve client retention

Evaluate: Assess The Situation—Advice Delivery StakeholdersUse the following table as a guide to define the key metrics for your organization, investment professionals, and clients. This exercise will be useful to tie back the business case results vs. your organization’s strategy metrics.

Notes

Organization

Investment Professionals

Clients

Business Case Playbook 5

Notes and Assumptions

Data Collection Elements

Investment Vehicle

AUM/Accounts Segmentation

Account Type Profile

Portfolio Strategy Profile

Portfolio Strategy Adherence

Portfolio Models

Portfolio Manager Structure

Portfolio Manager Capacity

PM Account/Relationships

Business Metrics

Vendors, Tools and Services

Channels

Personal Trust/HNW

Institutional Trust

Ultra HNW – Family Office

Broker-Dealer

Internal Asset Management

Financial Planning

Other

Evaluate: Building The Business Case—Data CollectionUse the following table as a guide to gather the current data elements required to model the business case. In addition, break down the data by channel to ensure the optimal results across the organization.

6 Business Case Playbook

Objective Results Summary

Quantitative.

Three-year view of net economic impact including net present value and internal rate of return

Qualitative.

Benefi ts to fi rm, investment professionals, and clients

Effi ciencies.

Account management, operational, risk management, etc.

Evaluate: Building The Business Case—ModelingEnvestnet’s Wealth Management Solutions group prepares a customized executive summary and three-year benefi t/cost analysis using the information from the Situation Assessment & Data Collection. The output shows the net economic impact, including the expected asset growth, incremental revenue, and potential cost savings.

Build A Business Case To Deliver Your Distinct Investment Advicewhat challenges does your organization face today?

Driving top-line growth without sacrifi cing the bottom line

Integration of investment management delivery across multiple channels

Scaling the platform: ways to handle more clients; grow assets without additional resources

Increasing risk management needs

Cultural differences among a wide range of advisors with all types of backgrounds

Advisor adoption for fi rm’s best thinking

Client experience consistency within and across channels

Improved client retention

Other

Business Case Playbook 7

The information and analysis expressed herein is for general and educational purposes only and is not intended to constitute legal, tax, securities, or investment advice. The graphical illustrations contained herein do not represent any client information or actual investments. The information provided is based on currently available information as of the date of this writing and may be subject to change at any time without prior notice. Envestnet makes no representation that the information provided is accurate, reliable or error-free. Envestnet reserves the right to add to, change, or eliminate any of the services listed herein.

FOR INSTITuTIONAl ClIENT uSE ONlY. NOT FOR uSE wITh ThE PuBlIC

© 2013 Envestnet. All rights reserved. wMS-PlAY-0613

Envestnet Wealth Management Solutions is the innovative provider that progressive wealth management organizations choose to help them implement their unique portfolio solutions. Our distinct approach combines an integrated wealth platform, research services, and advisor development that can help these organizations support revenue growth, improve profitability, and manage risk. More information is available at www.envestnet.com/wms.

For more information, contact Gavin Spitzner at 973.802.7760 or gavin.spitzner@envestnet.com