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#TCF2016#TCF2016
Robo-advisors and automationOpportunities in the new digital investment landscape
Jeremy BootBreakout E2 19.05.2016
#TCF2016#TCF2016
Part 1
The Robo-advisor landscape
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Robo-advisor
Core investment
management
Automated technology
Digital offeringLow pricing
Simple UI’s
Robo-what? 3
Robo-advisors are a class of financial adviser that provides portfolio management online with minimal human interventionForm Wikipedia, the free encyclopedia
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The hype
55-60 billionforecast for digital advice AUM by end 2015‘Robo-advising’ – KPMG, 2016
$2 trillion Robo-advisors to run by 2020 if this model is right‘Bloomberg Business’ – 2016
$7 trillion AUM forecast to grow to in 2025Robo-advisors: The Hype, the Reality and the Future’ – Gartner, 2016
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$55-60 billion, forecast for digital advice AUM by end 2015‘Robo-advising’ – KPMG, 2016
Robo-advisors to run $2 trillion by 2020 if this model is rightBloomberg Business, 2016
AUM is forecast to grow to … $7 trillion in 2025‘Robo-advisors: The Hype, the Reality and the Future’ Gartner, 2016
The hype
“ ””“
”“
5
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Digital entrants 6
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The market is generalising and no longer limited to start-ups with wealth managers … bringing investment dollars and distribution to the robo-advisor space
‘Robo-advisors. Capitalising on a growing opportunity’– Deloitte, 2015
It’s not just about start-ups 7
“”
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Disruption is here…and there is massive potential 8
only 20% of mass affluent americans have a financial advisor
An untapped market open to a low touch digital offering
“ ”Mass affluent households (US$250k - 1m in assets) hold about US$7 trillion of wealth.‘Advice goes virtual’ – EY, 2015
“ ”
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Investment automation across the spectrum 9
Fully automated Hybrid: Advisor assisted Advisor led
Wealth SegmentationMass Market Mass Affluent HNWI UHNWI
‘Robo-advisor’Digital-only channel
‘Robo-advisor’Digital + RM contact
Traditional model+ Digital
Risk profilingTarget asset allocationAutomated rebalancing
ETF’s
+ Virtual meetings
Investment ProposalFull range of investment
vehiclesAdditional services (e.g.
financial planning)
+Personal relationship
Face-to-face meetingsIn-depth review
Full private banking services
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Although it is only the beginning, wealth managers should react, as this hybrid service model will likely become the new-norm
Hybrid: the future of advisory? 10
“ ”‘Robo-advisors. Capitalising on a growing opportunity’ – Deloitte, 2015
Hybrid Robos will Manage 10% of Investable Assets by 2025“ ”‘Hybrid Robo-advisors for Wealth Management and Banking’ – MyPrivateBanking research, 2016
Few individuals are willing to rely completely on roboadvice
“”‘Robo-advisors: The Hype, the Reality and the Future’ Gartner, 2016
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Part 2
Temenos’ vision for Robo-advice
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Automated investment management offerings
Temenos’ vision
Full range covered
Wealth Suite
integration
Attractive, intuitive
UXMulti-
channel
Modular approach
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Core investment process 13
Client profiling
• Questionnaire covering risk appetite, instrument knowledge & investment objectives
Strategy allocation
• Algorithmic assignment to Investment strategy
• Includes asset allocation and instrument lists
Optional refinement
• Option to refine risk level
• Option to revise asset allocation weights
• Option to revise instrument selection
• Option to set instrument white & black lists
Automated rebalancing
• Periodic and on-event automated rebalancing
• Automatically generated proposal
Order proposal
• Automatically generated proposal
• User alert• Manual
refinement• Order
validation
Alignment check
• MIFID checks
Order submission
• Confirmation of order proposal and placement
Fully automated
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Core investment process 14
Client profiling
• Questionnaire covering risk appetite, instrument knowledge & investment objectives
Strategy allocation
• Algorithmic assignment to Investment strategy
• Includes asset allocation and instrument lists
Optional refinement
• Option to refine risk level
• Option to revise asset allocation weights
• Option to revise instrument selection
• Option to set instrument white & black lists
Automated rebalancing
• Periodic and on-event automated rebalancing
• Automatically generated proposal
Order proposal
• User alert• Manual
refinement• Order
validation
Checks
• MIFID checks• Order checks
Order submission
• Confirmation of order proposal and placement
Fully automated
Hybrid / advisor assisted
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Additional features – WealthSuite Channels 15
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Additional features – Portfolio Consolidation 16
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Additional features – Portfolio Analysis 17
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Additional features – Reporting 18
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Additional features – Secure Messaging 19
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Portfolio rebalancing mass processing
Configurable rules to determine rebalancing frequency
Alert generation for order proposal
Periodic reassessment of user profiling
Volume handling
System functionality 20
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Integrated goal-based planning
3rd party account aggregation
Digital communications
Currency hedging
Management monitoring and reporting
Possible future evolutions 21
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Robo-advice is here to stay
Different segments have different needs. There is space for a range of offers.
You need to be present to stay competitive
Temenos offers the integrated product set to help you succeed
Conclusions 22
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Don’t forget! 23
Join the conversation – Tweet or Facebook post the #tcf2016
Download this presentation now – you can download this presentation and other TCF materials from the TCF2016 app
Have your say – take part in the 9th annual TCF survey, also available on the TCF2016 app
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Thank you