"Trends and Transparency in Investment Advisory" !

Aziz Lalljee, Co-founder of Finom !!Tweet: @FinomInc #cloudcamp

#cloudcamp @CloudCamp_CHI

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Aziz Lalljee Co-CEO & Co-Founder

Trends and Transparency in

Independent Investment Advisory

CloudCamp Chicago

November 3rd, 2014

Investment Advisory Industry

Technology as Enabler: Independents

Technology as “Disruptor”: Robo-Advisers

Technology MIA: Adviser Selection and Analytics

Finom: Transparency and Personalization

Total US Household Investable Assets ($27.4 T)

$500K - $2M:

$8.1 T

$100K - $500K:

$4.6 T

< $100K:

$1.6 T

> $20M:

$2.1 T $10M - $20M:

$2.1 T

$5M - $10M:

$3.1 T

$2M - $5M:

$5.7 T

TO ADD:

All Households

$27.4 T

US GDP:

$16.8 T

Source: Cerulli Associates, 2012; Morningstar, 2013 Source: WorldBank.org

The Managers

Other (9%)

Independents (17%)

Broker/Dealers (34%)

Wirehouses (40%)

UBS, Wells Fargo, Morgan

Stanley, Merryl Lynch

LPL, Raymond James, etc.

Registered Investment

Advisers

Insurance and Bank

Broker/Dealers

Source: Cerulli Associates, 2012; Morningstar, 2013

The Independents

$2.2 - $3.1 T Double Digit

Growth

Growth Drivers

Owner v. Employee

Asset Management v.

Asset Gathering

Fees v. Commissions

(Services v. Products)

Independent, Fee-only

Fiduciary: Gold Standard

Large Institutions:

Integrated, Mainframe

Legacy Systems

Independents:

Dispersed, Smaller,

Fragmented, Early

Adopters

Source: RIA Database; Morningstar, 2013

Structural

Tailwinds

Technological

Implications

Technology As Enabler of Independents

To Go Independent…

Wide variety based on services and sophistication

Range from: RIA In A Box (outsourced compliance); TAMPs; HighTower (bespoke platform)

Improve Practice Management…

Trade Execution and Rebalancing

Financial Planning

CRM

Performance Reporting

Integrations and Linkages

Technology As “Disruptor”: Robo-Advisers

Source: iconiccanvasart

Robo-Advisers

Issues?

Sustainability: Valuations

Survival: Asset Flight

No Financial Planning or

Auxiliary Services

No Personal Relationship

New Models?

Proprietary v. White Label

Unbundling of Services

Hybrid Advisers

New Entrants (Advisers,

Funds, Tech Companies)

Still Very Early

A Sense of Proportion?

Technology MIA: Adviser Selection and Analytics

?

2%

% That WouldRecommend

1 - My-Way Investment Advisors Survey

2 - Boston Consulting Group

30%

% Satisfied(Females)

3 - Tiburon Report

Satisfaction Rates For Investment Advisers…

% Satisfied

44%

$0

$250,000

$500,000

$750,000

$1,000,000

Today 15 Years 30 Years

The Value of Good Advice

All Advisors Are Not Created Equal

Thank you!

contact@finom.com

https://www.finom.com

Aziz Lalljee Co-CEO & Co-Founder

CloudCamp Chicago

November 3rd, 2014