THE BIONIC ADVISER EVERYBODY WILL HAVE TO CHANGE 5/12/2015. Joe Duran, CEO. Digital Disruptions Ahead

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1 THE BIONIC ADVISER Joe Duran, EVERYBODY WILL HAVE TO CHANGE Digital Disruptions Ahead Forty percent of the companies in this room won't exist in a meaningful way in 10 years unless they change dramatically. Getting market transitions right is the first issue, and digitization and the Internet of everything is at the front of that. John Chambers, Wall Street Journal,, February

2 THE SEA CHANGE IN THE FINANCIAL SERVICES INDUSTRY 1. Rise of the category killer 2. Death of the craftsman 3. Rise of the sophisticated consumer 4. Digitization and reinvention of the client experience 3 Market acceptance Market share battles Model refinement Pricing compression Industry disruption Redefined marketplace Product development Market definition Pricing established The key to survival in times of rapid change is to challenge and question everything. 4 2

3 THE POWER IS WITH THE PEOPLE Consumer Revolution Revolutionary shifts in how consumers make purchases product and service providers must redefine their entire approach to survive redefine their entire to survive Consumers can get what they want, so quickly, and in a personalized way Expedia killed the travel agent Apple demolished the music store Netflix closed the video store the videostore Starbucks redefined the coffee shop 5 THE FINANCIAL FIRM OF THE FUTURE Personalized interactive ti - tailored to you Omnipresent easy - everywhere - all encompassing Commanding aspirational - price dominant - culturally aligned 6 3

4 TECHNOLOGY IS SHAPING OUR INDUSTRY Digital solutions continue to enhance our industry by challenging the status quo. Transparency & Access Interactive planning & investment Pricing gpower 7 QUESTIONING THE TRADITIONAL PLANNING MODEL Traditional wealth management assumes that our job is to maximize wealth. Is that the right goal? Accumulate Financial Dependence Life Stages Protect Financial Independence Transfer Financial Transcendence We decided to ask. 8 4

5 THE RESEARCH TURNS OUT IT S NOT ABOUT THE MONEY Our research asked people to tell us their financial life story. What we learned: 93% told us their entire life story 90% of financial life stories focused on working and spending 83% of the turning points involved a trade-off People are happiest when financial decisions align with personal values 10 5

6 FINANCIAL LIFE AND LIFE STORIES ARE SYNONYMOUS When asked about their financial life story, 93% told us their entire life story. Financial life has been imagined in terms of the industry s interests rather than the interests of clients. Life is unpredictable yet we try to standardize in order to scale financial advice. 11 CONVERSATIONS NEED TO CHANGE Working and spending are central to our financial lives. 53% of chapters were about working 30% of chapters were about spending 10% of chapters were about saving 7% of chapters were about investing People need more guidance on how to work well and spend well. 12 6

7 LIFE IS A SERIES OF TRADE OFFS 83% of the turning points described in people s financial life stories involved a trade-off of one kind or another. Private school tuition vs. a bigger house Security of a salary vs. possible upside of a start up Higher pay, more pressure vs. low stress, modest life Second home vs. an earlier retirement We need tools to help people make choices that are right for them. 13 PEOPLE WANT TO BE PROUD OF THE LIFE THEY LEAD A financial life is about the pursuit of one s ideals, not money. Low Points Bouncing a check Being underpaid Couldn t afford private school Credit card debt High Points Buying your first home A promotion Sending a child to college Coming out of debt Every memorable moment in your financial life is when you have to chose between money and living your ideal life. 14 7

8 What is the role of the new adviser? 15 ADVISER OF THE FUTURE 8

9 SOMETIMES IT REALLY IS DIFFERENT The new wave of competition Digital Assets Since In 2 years? Betterment Asmarter way to invest $1.4B 2010 $5B? Schwab Intelligent Investing has changed March $1.5B $12B? Portfolios forever 2015 Vanguard Personal Advice reinvented $17B 2012 $50B? Source: vangaurd.com, schwab.com. April analyst call (Schwab), 17 HUMAN VS. MACHINE THE DECISION MAKING MATRIX 18 9

10 THERE ARE SOME THINGS A MACHINE CAN NOT DO JUDGMENT EMPATHY 19 THE EVOLVING ROLE OF THE ADVISER Adviser of the Future Old Standard New Standard Approach Intellectual Intellectual & Emotional Client Value Product Process Decision Making Dictatorial Collaborative Role Sales/Rainmaker Managing System 20 10

11 WILL YOU REST OR MOVE FORWARD? HELPING CLIENTS MAKE THE BEST DECISIONS THEY CAN Success may mean adjusting, refining and changing your day Support Focus Process Fees Start with a highly qualified staff & the power of technology Dedicate your time to customers, not operations A scaled system that engages the clients entire financial life, not just their money Shifts your economics to align with customer expectations 22 11

12 IT S TIME FOR ALL OF US TO CHOOSE Consider your business model options. Continue Services Fee Results Financial investments Asset based & shrinking Need more clients to just stay the same Evolve Financial Planning Fee based, static, low renewals To compete, higher costs and low margin Transform Financial life Dynamic & Businessgrows Business grows with with management ongoing fee what people really value 23 THE RISE OF FINANCIAL LIFE MANAGEMENT Shifting the adviser value proposition From Alpha generation 100 bps Manager selection Asset allocation 100 bps Tax optimization To bps Financial planning Behavioral management Free bps 24 12

13 WE ARE THE SOUL OF THE MACHINE The bionic adviser. Energized by judgment and empathy. Empowered by technology. Is our job as an adviser to maximize net worth or maximize people s lives? 25 BIONIC ADVISER Back Office Middle Office Front Office Accounting Operations Client Experience Payroll Compliance Technology Case Prep Doc Prep CRM Data Gathering Signatures Collaboration Your client experience needs to evolve to be all encompassing & omni-present

14 Where do you fit in the equation? are you systematized or personalized? are you a generalist or a specialist? are you growing or stagnant? are you compromising or transforming? 27 LIFE IS BEST WHEN YOU DO WHAT YOU LOVE A powerful life balances time, energy and purpose focus on what you do best. Money Work Play Family 28 14

15 It is not about the money, it s about your entire life 29 THE NEW CLIENT EXPERIENCE Interactions Process Engagement Old Standard Personality Yellow Pad & Binder Quarterly & face to face United Capital Standard Gamification & Process ipad & Guidebook On demand d & Skype Service Personality Team Based 30 15

16 AN EXAMPLE OF POWERING THE BIONIC ADVISER Financial advice can be both personalized and scaled How do I think about money? What matters to me? Where am I today? How do I get where I want to go? How am I doing? FRIENDLY INTERACTIVE TRANSPARENT 31 A GAME CHANGING PLAN E-guidebook Capturing the UC experience

17 TAKE THE QUIZ ARE YOU A RACE HORSE OR A PACK MULE? A. Are the people in your office specialists or generalists? B. When was the last time you had meaningful change in the service you offer your clients? C. Do you grow more than 10% a year, net of market changes? D. Are you spending more than 30% of your life working on mission critical but low-value work? 34 17

18 @DuranMoney United Capital Financial Advisers, LLC (United Capital) provides financial guidance and makes recommendations based on the specific needs and circumstances of each client. All referenced entities in this d th ifi d d i t f h t f d titi i thi presentation are separate and unrelated to United Capital. Any references to any specific commercial product, process, or service, or the use of any trade, firm or corporation name is for the information, and does not constitute endorsement, recommendation, or favoring by United Capital. Expected results from marketing programs are goals and not guaranteed. There is no assurance that any marketing program will yield success. Noted historical success of regional offices since joining United Capital is not an indication of future success of those or of any other United Capital office