The Changing Landscape of Financial Planning. 3 rd March 2017

Transcription

1 of Financial Planning 3 rd March 2017

2 The Agenda Tomorrow s World New Opportunities 2

3 The financial planning landscape is evolving to meet the changing needs of customers Digitalization Regulation Trust 3

4 Digitalization 4

5 Social media channels are brimming with useful commentary about companies, products and services 90% 73% use a smartphone Of all adults are active social network users 33% 83% Promote/complain on social media Promote/Complain on Facebook Source: Deloitte (2015); Singapore Business Review (2015) 5

6 Robo-advisors that provide online financial services will challenge traditional financial advisors Efficient Accurate Risk Transfer Investment advice algorithms are optimized for fees, taxes and personal needs Data-driven insights and real time updates provide timely and accurate information Reduced risk of customer being mis-led 6

7 The growth of such revolutionary concepts cannot be ignored Betterment Erica by Bank of America 7

8 Integrated online platforms provide new ways for client engagement Self-directed learning sites: comparefirst Virtual-advisers: NTUC Income Adviser Connect 8

9 Regulation 9

10 A strong regulatory landscape is required to safeguard Singapore s reputation as a professional and resilient financial services hub MAS Releases Results of Mystery Shopping Survey Key Findings Fact-find: Extent of information collected from the shoppers was inadequate 6 July 2012 The Monetary Authority of Singapore (MAS) has today, released the findings of its mystery shopping survey on the financial advisory process of banks and insurers. The objective of the survey was to assess the financial industry s implementation of MAS guidelines on fair dealing. These Guidelines set out five fair dealing outcomes, including providing adequate information in the advisory and sales process and ensuring that advice provided to customers is suitable. The Guidelines also emphasize the responsibilities of the Board and Senior Management of financial institutions in delivering these fair dealing outcomes when providing financial advisory services to customers Source: MAS, 2012 Product Disclosure: Disclosure on risk, fees, warnings, exclusions and caveats were omitted Product Suitability: Almost a third of the product recommendations were unsuitable 10

11 MAS aims to help the financial services industry to develop a sound and well permeated risk culture through a range of initiatives Financial Advisers Code of Conduct MAS Initiatives Issuance of new policies: e.g. Issuance of the Guidelines of Fair Dealing Extension of existing policies: e.g. Extension of the Consumer Protection Act Introduction of The Balance Scorecard Framework 11

12 Regulatory changes are designed to drive consumer confidence Public perception Customer protection Drive professionalism To improve public perception of the industry in a post-crisis environment and regain the trust of customers Protect customers against unfair practices and to disclose additional information like risks and fees Ensure that representatives display professional and ethical conduct to serve the clients best interest 12

13 Trust 13

14 On top of regulations, financial advisers need to build trust by adopting a customer-centric approach 94% 50% The onus is on financial advisers to act and build enduring relationships with customers Trust and reliability in a brand was the most important consideration Source: Singapore Business Review, 2016 Source: MAS, 2016 Of complaints were related to service standards. 14

15 Tomorrow s world 15

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18 A demographic shift is under way, thus it is important for financial advisers to look into changing customer needs >50% 40% By 2020, more than half of all investible assets will be controlled by Gen X and Millennials Source: Strategy&, 2016 Source: MAS, 2013 By 2020, Asia is likely to account for almost 40% of the global market There is a need to cater to the Generation X and Millennials customers 18

19 And they have to adapt to new customer expectations Real Time Borderless Personalised Secure Customer expectations for financial services 19

20 Despite the increasing importance of digital channels, the role of the financial adviser will remain highly valuable vs Humans Robots 20

21 Hence, it is imperative for financial advisers to adjust and adopt to provide quality customer-centric service Be Professional Be Digital Digital Aptitude Leverage Data Know your client a lot better Build Trust Know your competition Know your industry 21

22 Remember to ask yourself these questions Am I really using a customercentric approach? Are my actions in line with regulations? How can I leverage on digital to improve my service offerings? 22

23 Contact R. Raghunathan Partner, Management Consulting PricewaterhouseCoopers Consulting (Singapore) Pte Ltd Tel:

24 Thank you!