‘Reviewing your choice of Platform in light of RDR’ Business Development Director

Agenda  The impact the RDR platform paper may have on your business  Tips to support and enhance your ongoing platform due diligence  Delivering enhanced planning capability

Future drivers impacting on business Base: All Respondents (387) What future drivers will have an impact on your business over the next 12 months? Please tick all that apply. Source: NMG IFA Census February 2009 RDR and TCF will be the dominant drivers for the future changes

Meeting the requirements of the FSAs Retail Distribution Review  From 2012 all Advisers operating as Professional Financial Planners will be required to agree the price of advice separate to any commissions generated through the sale of a product  Firms wishing to grow recurring revenues will need to demonstrate the value that clients continue to receive for ongoing advisor charges  Advisers will need to ensure absolute transparency of charges

Single platforms vs. independence  FSA accepts that for client groups where needs are similar and suited to benefits of a wrap platform, the use of a single suitably comprehensive wrap solution will not jeopardise advisers’ independent status.

FSA CP 10/29 – Use of single platform  One platform for all clients for all investments Requires clearly defined client bank Similar range of needs and objectives Selected platform can address all needs Some clients will have needs not addressed by wrap These “outlier” clients would need to be “screened out”  One platform for all clients for most investments A more likely, realistic and pragmatic scenario Means “default” wrap used Allows room for off-platform/niche solutions  One platform for some clients Single wrap for defined group with same needs Means off-platform or other platform used for clients outside this client group e.g. one wrap per market

Initial Charges Annual Charges Initial Charge Flexible Adviser Remuneration Flexible Adviser Remuneration Elevate Portfolio Charge Net AMC Itemised charges Fund manager rebates paid to client account Itemised charges Composite Charges (Bundled) Explicit Charges (Unbundled) Annual Management Charge Transactional advisers ‘product-led’ Financial planners ‘Investment-led’ Supporting transition Elevate Composite/Cofunds/Fundsnetwork/ /Skandia/SL Fundzone Elevate Explicit/Transact/JamesHay/ Novia/Ascentric/Nucleus/Lifetime SL Wrap Elevate Charge Multiple Platforms or a Dual Charging Platform????

 Tips to support and enhance your ongoing platform due diligence

Wraps – a practical definition The FSA defines wrap platforms as follows: ‘Platforms are online services, used by intermediaries (and sometimes consumers directly) to view and manage their investment portfolios.’ FSA Discussion Paper on platforms, June 2007

Life and pensions provider #2 #3 Life and pensions provider Funds supermark et SIPP provider Life and pensions provider Back- office software Exchange Advice tools #2 #3 #2 #3 Wraps bring operating benefits FROM THERE & THENTO HERE & NOW

Wraps = a venue for investment

Due diligence  3 elements influence relevance & value of wraps: 1.Type of client you wish to advise 2.The relationship you wish to offer your clients 3.The investment proposition relevant to your market  Some “niche” areas not served by wraps – yet!  So what should I consider when choosing a wrap…

Due diligence 1.Strategically Identifying a wrap that meets: The operating requirements of your desired business model The investment proposition needs of your target clients Criteria you use to assess fitness of a key business supplier 2.Tactically (i.e. client by client) Confirming whether utilisation of the wrap platform you have selected is suitable for a specific client Deciding whether to “screen out” clients for whom a wrap-based proposition is not suitable

Due diligence  FSA – Fact-sheet: Platforms: using fund supermarkets and wraps (considerations when examining wrap platforms & their providers)  Your Business Agree that wraps offers business and client benefits Understand the client types or life-stages you wish to serve Articulate the client value proposition and processes you will deliver Have a robust investment proposition you wish to deliver Create criteria a wrap has to satisfy for your model - based on FSA Fact-sheet Include qualities in a business supplier that protect/enhance your reputation e.g. financial strength, disaster recovery, added value services etc. Create a short-list before RFI Conduct interviews/site visits Select wrap Decide how often you will renew your due diligence exercise Document it!!  AXA Wealth – Elevate Wrap Platform – Our story: Due Diligence – short leaflet and comprehensive document “Why We Chose Elevate” – AXA Business Consultancy

 Delivering enhanced planning capability

Craig Monahan- Platform Consultant Presentation - Upload/ download your own music/ videos - Create your own playlists - Download your own apps Place business What is Elevate- Just a bit of technology… Use as a phone and listen to music Primary Secondary Camera Calculator Internet Diary GPS Tools Reports Platform and Business consultancy Bespoking So What? Entertainment system Portable office Digital photo album Phone and MP3 - Improve client experience - Increase business efficiency - Help clients be more engaged with investments - Tool to place business - Own logo and colour scheme - Set your own pricing structure and remuneration levels - Create your own model portfolios - Choose your own best buy lists Elevate is an enabler, it allows you to do as much or as little as you want What else - Market leading - Ergonomic design - Future updates - Product guarantees - Recognised brand - Financial stability - Commitment to market - Future development

Elevate proposition  Strategic importance to the AXA group  Built on sound principles  Sensible use of award-winning technology  Technically innovative tax wrappers  Straight Through processing  On-Line Anti-Money Laundering  Negative Affirmation  Supports financial/lifestyle planning  Access to the right investments  Underpins a Flexible Remuneration Strategy  No barriers to entry or exit  RDR friendly  Clear upgrade path  Specialists to support transition

Risk report Consistent with offline version and so can be used in conjunction Provides an audit trail and tangible output Stored in the client document library for future reference Current risk rating stored on client account Can store your own

Enhancing your investment proposition  Old Broad Street Research (OBSR) model portfolios Created and managed by OBSR Directly aligned to TP Risk Assessment outputs Reviewed quarterly, alerted when changed Enables outsourcing of fund selection  Adviser model portfolios Created and managed at adviser or firm level May be applied across a number of different clients Efficient management of multiple portfolios with similar needs  Client–specific model portfolios Created and managed at firm or adviser level Applied to one client account only Can be applied across different wrappers in the same account Adviser Client OBSR

Enhancing your planning capability  Ongoing Management of risk is critical  Model Portfolios help with Core Investment Strategies  Models can increase service to more clients  Technology & Wraps can deliver the efficiencies required – STP  Dual Charging Option  Verbatim funds are listed on the Elevate Platform

Questions?