Category Archives: Wealth Mgmt

Perfect Storm Challenges and Solutions

We think there’s a perfect storm coming in the financial services market with challenges being faced by both consumers and the providers they deal with. ….LegacyTracker can help 

Too extreme? Maybe

We’ve been collecting some evidence in the form of published surveys, research & articles for quite some time. We think all of that reading and collecting has paid off. We think there’s a lot of evidence to support the need for LegacyTracker which is our personal financial management tool . This is an ongoing list in no particular order from our growing collection of supporting surveys, articles and research. Note: George Clooney did not help with this project; he was busy filming the Perfect Storm among his many other activities.

From Digital Insight: The  88% of consumers who now pay bills and transfer funds online, 62% would like a single place to manage their complete financial picture, no matter where the information originates. Households on average have more than three financial institution relationships for wealth and savings solutions and up to six credit card accounts. LT: Legacy Tracker provides a safe & accessible place to safeguard all of the important information and documents in life

2011 US Trust Insights on Wealth Survey: A survey of wealthy Americans with $3M or more of investable assets 56% of those surveyed have not documented personal property and assets, and roughly half have not documented instructions about the distribution of personal property or assets among heirs; even though 25% acknowledge their heirs don’t understand their wishes for how to divide special possessions LT: Helps consumers safeguard their hard-earned assets & can help facilitate important conversations with family members and loved ones about estate planning or final wishes 

2008 Innovations in Retail Financial Services IG&H Consulting & Interim, Woerden:  In financial services these days, a lot of companies struggle to win in severe price competition. However, a financial institution should develop it’s business on long-lasting & customer value driven business models; price is not enough. An element could be innovation.            LT: Helps financial service providers innovate & differentiate their offerings

2011 Banking on You by Thomas Watson, Canadian Business Magazine: Canada’s biggest banks are desperately trying to find new ways to connect with customers. Increased competition has heightened the banks’ interest in offering value and quality to customers, and forced banks to form individual identities. “The ability to introduce new fees is limited, raising the importance of gaining share through better service, broader relationships with clients and growth markets” (Margaret Willis, HSBC Executive VP of Retail Banking and Wealth Management) LT: Helps financial organizations differentiate in a busy marketplace and provide a meaningful way to demonstrate customer advocacy which can deepen client relationships

2011 Canadian Life & Health Insurance Association (CLHIA) : A national online survey of 1,504 Canadians over 18 by Leger Marketing showed only 26% of Canadians think their personal and financial information would be easy to access in an emergency. 56% said their personal & financial information is “somewhat organized” while 11% said it was “not very organized”  LT: Helps users enhance their level of emergency preparedness and by safeguarding important financial legacy & information

2010 Intuit Financial Online financial management survey: Banking customers view online financial management solutions from their bank or credit union as competitive differentiators. 52% of those surveyed said they would leave their current financial institution for one that offers better money management capabilities. Nearly 50% of respondents said they’d already switched banks or credit unions recently. and one-third of them switched because their financial institution did not provide satisfactory online solutions LT: Financial institutions need to offer their customers more in the way of tools & solutions that help them manage their money –a differentiator in the marketplace

 2011 Investment Executive Magazine – Prevent Executor headaches Bank of Montreal Survey confirmed CHLIA’s figures, almost 50% of Canadians who have been appointed to be an executor of a will have experienced administrative “complications” More than 25% have experienced legal issues. “If everything is not written down and documented, the difficulty in sorting out the mess can tie up the settling of an estate (Carol Bezaire, VP of Tax & Estate Planning with Mackenzie Financial. ” Technology has made some things invisible. In their capacity as executors, in some cases, the bank has had to take possession of the deceased’s computer and hire experts to search the hard drive to find crucial information (Royal Bank Estate and Trust Services)  LT: Reduces financial risk for individuals & their loved ones of unclaimed funds for families but it also safeguards families from incurring additional grief in the form of additional delay, cost and stress in times of emergency

2013 For the Love of Money Blog  Are you finances organized? Get into the habit of organizing your finances and you’ll be in for some happy surprises. …..The truth is, we create needless work and worry for ourselves when we do not make a little effort to get financially organized. Often, the biggest leap to getting a house in order is getting over a negative mindset. A lot of people are unwilling to organize their finances because they think there is simply too much to do.  LT: We provide the place for consumers to get organized & stay organized. Simple on boarding and Simple to stay updated. Our built-in net worth tracker & alerts are intended to motivate you to stay up to date

2011 Investment Executive A New Focus on Financial Literacy by Keith Costello of CIFP     A new focus on Financial Literacy “What we have heard (The Canadian Institute of Financial Planners) is the need for unbiased but comprehensive learning materials. Consumers want content that will help them understand financial concepts in a more detailed way and that will guide their financial decisions. We should ensure that these types of materials are readily available” “there is no better marketing and brand positioning than investing in your customers”  LT: Providing tools and opportunities to enhance financial literacy will pay off for financial services providers-by way of better engagement and increased revenue opportunities and ultimately the success of their clients  

2011 Investment Executive Having the “talk” with your clients by Brent Jolly  As most clients have experienced lower investment returns over the past 5 years, it is becoming more challenging for advisors to demonstrate their value to clients. LT: Our online solution allows Advisors to offer a valuable tool to clients and their families, allowing them to safeguard financial assets and some assistance in facilitating discussions about estate planning. Advisors in effect are provided an opportunity to reach out to the next generation

 2013 21st Century PFM for a Mass Audience  Capitalizing on the power of personal finance management will first require the industry to break free of 1980s thinking about
who uses PFM and why. Today, 21% of U.S. consumers mix and match 1 or more of the 3 primary sources of PFM services:  1) desktop software, 2) bank PFM offered through online banking 2) bank PFM offered through online banking, or 3) web PFM offered through an explosively growing number of online and mobile players. That translates into 49.3 million adult users – and 191 million who use none of them.  Financial institutions are at risk of losing loyalty from PFM hungry customers.

We’re not exactly done. We’ll add to this list as we find the time. We’ve got lots more to add.

Financial Advice

Rethinking Client/Financial Advisor Relationships

A 2012 Accenture report delved into how changes in client expectations along with a more competitive landscape is forcing wealth management companies to rethink their relationships with clients and their own advisors.

Here’s a summary:

  • 2 Major trends are reshaping the playing field for wealth management: 1) a more competitive marketplace and 2) the changing nature of clients
  1. The market is becoming more crowded with players from adjacent industries entering including those who can leverage significant capabilities and existing relationships (banks) or their brand presence and existing distribution channels (insurance companies) or those that can offer direct product distribution without advice (Non financial firms
  2. The need for advice has never been greater, clients want 24/7 access to advice, diversified sources of advice, and less costly advice. Advice-led distribution will remain a key focus. But those that are successful will find a new ways to deliver & provide more options for delivery including direct access to information, fairly sophisticated planning tools & risk metrics

How can the client-advisor relationship evolve in response to growing consumer demand for customization and the imminent threat of new competitors ? T

he Accenture report suggests firms and advisors work to

  • Be more customer centric.
  • Enable collaboration,
  • Improve process efficiency
  • Support stronger relationships.
  • Leverage technology to reduce risk, improve compliance and make selling simpler.
  • Build deeper relationships with clients/enable advisors to be more productive
  • Integrate mobile and social strategies
  • Enhance client experiences via mobile access to data along with interactive technologies 
  • Add a human element to digital interactions
  • Add analytics, insight driven intelligence and interactive tools for advisors

Accenture reports that firms must integrate the digital experience into the overall advisory experience, to support the advisors’ role. Top advisors at wealth management firms will adapt to changing client expectations and new competitive forces by doing what they already do best and

  • Showclients that they can provide value beyond that of direct channels
  • Provide high-touch, client-focused advice that reinforces their understanding of clients’ financial needs
  • Use tools and systems to increase productivity
  • Collaborate both internally and externally to build solutions that are tailored to their clients’ personal preferences as well as meet their financial goals.

Today’s top-performing advisors have developed personal, successful strategies and tactics. but those at the top, need to work to leverage such practices throughout the broader advisor network. Accenture suggests that Firms should give adequate consideration about how to provide advisors at all levels with the tools and capabilities needed to deliver a branded, valuable and distinctive client experience.

Also, further strategies are required in order for firms to differentiate by building on their current strengths giving appropriate consideration to how they will:

  • Satisfy client expectations for a customized experience,
  • Institutionalize and promote the practices of top performers
  • Address the proposal creation/meeting preparation activities to make way for more highly tailored experiences  while cutting preparation time
  • Increase customer intimacy through branded and customized client experiences, intended to result in higher prospect-to-client conversion and higher lifetime value of relationships
  • Build capabilities to make the advisor a one-stop-shop for a complete set of financial services, including tax, estate and retirement planning
  • Complement face-to-face with self-serve interactions, providing clients with advice when, where, and how they want it

You can read more of Accenture’s Report here   and …

You can learn about how LegacyTracker can help Advisor/Relationships by contacting us

 

The Boom for Financial Tech around the World

 Global Fin Tech Investments hit $3 Billion in 2013

Accenture’s newly released 16 page report  ‘The Boom in Global Fin Tech Investment’ highlights that:

  • Global fin tech financing has tripled over the past five years
  • Silicon Valley based companies account for 1 of every 5 Fin Tech deals and 1/3 of funding allocated to Fin Tech
  • Europe accounts for 13% of all Fin Tech funding globally/15% of all global deals
  • However, London is now outpacing Silicon Valley on the basis of 5 year growth
  • The UK (specifically London) and Ireland-based companies taking the lion’s share of Europe’s Fin Tech deals.
  • The UK and Ireland represented 53% of Europe’s Fin Tech deals and more than 2/3 of Europe’s Fin Tech funding at 69%

Accenture on fintech

To get Accenture’s 16 page report go here 

 

Only 2% of Advisors know how to maintain the next generation of clients

From Advisor.ca article “Adapt to Wealthy Client Needs, or else” by Dean Dispalatro October 2013

Mr Dispalatro writes in his article about some wisdom shared by Keith Sjogren, managing director of consulting at Investor Economics including what he outlined as the 3 trends impacting the wealthy. 

  1. Sluggish economic growth resulting in income being depressed and personal wealth not growing
  2. Concentration of wealth in Canada’s is growing steadily. Those with more than $1M in investible assets now control 2/3 of the country’s wealth
  3. Debt reduction is a top priority with the wealthy

All of this leads Sjogren to conclude that the wealthy need more advice; but wealth management advice not investment advice. He also suggests that more attention should be paid to those with high incomes who have not yet accumulated assets of $1M as they probably will as real estate or business interests are sold and inheritances are received 

But he also points out the demographics of wealth at play.  By 2022, more than half of wealthy people will be older than 65. & that demographic is not made up of conspicuous consumers but  capital protectors with a big focus on leaving a legacy for their children. Hence, he concludes that advisors should shift their focus from “accumulation to preservation.”

Indeed the $900 billion that is set to change hands in the next 10 years.at least half will happen in wealthy families, making estate planning a key priority offering. But the issue remains; advisors are not doing an adequate job of getting to know the families of their clients;  which as he says “is a sure-fire way to lose the next generation when wealth changes hands

Investor Economics data backs this concern up.  When assets are transferred to a widowed spouse, only 55% keep the same Advisor.  When assets are transferred to the children, a whopping 98% move to a different Advisor.

Even millionaires are procrastinating

This from a 2010 article ” Wealthy Worry about Next Generation” in Advisor.CA magazine by John Powell 

Referencing a study by RBC Wealth Management of Canadian Millionaires:

  • 58% of millionaires think their children are facing an uphill battle when it comes to managing their finances
  • 49% don’t have confidence in their children’s abilities to manage the inheritance. 
  • 67% feel it is their responsibility to preserve wealth for future generations and leave their children with a healthy legacy,
  • But, 39% have no estate plan to speak of.

Contradictory?
Tom McCullough President/CEO of Northwood Family Office chalks it up to people just being human and not wanting to face what the future might hold for them and their loved ones. 

“Estate planning is complicated. It is about the future. It is about death. They don’t want to have to make those decisions now,” he explains. “I think it is one of the most important things people need to do is to sort through their personal affairs and their estate but there are a lot of folks who don’t do it, don’t get to it or don’t know how to do it.”

Thane Stenner, Founder/Director of wealth management at Stenner Investment Partners, an independent private family office group within Richardson GMP Limited, is not surprised by RBC’s findings as it mirrors the results of his own company’s research from 2006. which highlighted the top concern of the high-net worth clients as being how their children would handle the family finances in the future.

“What is interesting is there still seems to be some procrastination taking place. That is not surprising. Most successful, wealthy families are busy. They have a lot on the go. Estate planning or issues like that are never seen to be urgent and that is one of the reasons why a lot of the times quite candidly, that estate plans are not updated and are not properly papered,” says Stenner

Life is…. complicated. Death more so. Get Organized.

Orginally published Jan 13 2013

Stop procrastinating…Get your stuff together (please)….

This is a poster published first in the Wall Street in 2011 – It’s a good one..with an article from Saabira Chaudhuri titled “The 25 documents you need before you Die”  It’s cdrtainly an attention grabber.

25 important documents article

It’s a great poster and a fascinating story which talks about the financial consequences that befalls your family and loved ones if you fail to keep all your documents and important papers in order. In the US where they track, report and actively look for owners of unclaimed funds they know that the toll is great. $33B (now $58B) approximately in unclaimed bank accounts and other assets like paid up insurance policies.

You may or may not know (maybe this is your first visit here) that Canada is not so lucky. Only 2 provinces have any real unclaimed intangible property legislation in place (Alberta & Quebec).  That’s not the way it should be but that’s the way it is right now in Canada.

That sad fact, makes it even more critical to ensure that your records are organized and shared to make sure you reduce the financial risk that comes from not being so organized. So yes. Please stop procrastinating around this topic.

Read the article from the Wall Street Jounal here 

BMO study finds many Canadians unaware what investments they hold

A BMO study released in April 2012 made note of these results:

Approximately 80 % of Canadians were confident in their investment portfolio, but …..nearly 50% were unaware what investments they actually had..

Many not aware of their investments

BMO made these suggestions when they released the report:

  • The key is to monitor and add to your investments all year round.
  • Consistently examine your portfolio to make sure that diversification exists between stocks, bonds, cash and real-estate
  • Look to the long-term instead of the short-term as often times, Investors are scared by volatile markets and focus on the potential for short term-loss
  • The best fix includes consolidating your assets to keep track of where your money is being held.

As an accountant, I know first hand that many of my clients when I was in public practice were (and most likely are still) part of these stats. I know because I opened up a lot of their mail each April in order to prepare their tax returns (!) It’s one of the many reasons that I felt the need to develop LegacyTracker.

LegacyTracker can help you with these suggestions. Legacy Tracker offers individuals and families a simple, comprehensive and common sense online solution for monitoring, tracking, sharing and safeguarding important financial, legal and estate information.