Ensuring Investment Suitability ©2016 Distribution Technology Ltd. All Rights Reserved. Ben Goss, CEO, DT Conference key note

Ensuring Investment Suitability ©2016 Distribution Technology Ltd. All Rights Reserved. 4th Annual Dynamic Planner Conference, 2016 Ensuring Investment Suitability In a digital world

©2016 Distribution Technology Ltd. All Rights Reserved. Dynamic Planner has seen record usage in every quarter for the last four years 30,000 investment searches a month 1,000 investments profiled from 100 managers £1.7bn recommendations 2015 (£1.2bn 2014) £2.0bn managed against risk profiles 25 platforms integrated, 7 WealthConnect, iOS app usage up 300% in 6 months MyPlanning active customers up 37%

4 Assessing Suitability Finalised Guidance March 2011 Dear CEO Letters June 2011 TR15/12 Suitability of investment portfolios Dec 2015 TR16/1: Assessing suitability Jan 2016 MiFID II 2018 Significant suitability fines and sanctions:  2012 – Wealth manager - £412k  2013 – Asset manager - £3m  2013 – Intermediary - £6m  2014 – Asset manager - £18.6m  2014 – Bank - £12.4m  2016 – Wealth manager - £1.2m  Numerous back book reviews for larger firms  Numerous Directors banned for suitability failures from smaller intermediary firms ©2016 Distribution Technology Ltd. All Rights Reserved. Suitability remains a central focus for the FCA and industry

©2016 Distribution Technology Ltd. All Rights Reserved. What have we done to help in the last year?

©2016 Distribution Technology Ltd. All Rights Reserved. 1,000+ downloads in 10 days

©2016 Distribution Technology Ltd. All Rights Reserved. 30,000 searches each month and growing

©2016 Distribution Technology Ltd. All Rights Reserved. £2bn in risk target managed funds and growing Risk target managed

©2016 Distribution Technology Ltd. All Rights Reserved. Unique ACE Ratings launched in January. Adopted by Bankhall for their research service ACE ratings

©2016 Distribution Technology Ltd. All Rights Reserved. Dynamic Planner portfolio risk breakdown and My Planning client view

©2016 Distribution Technology Ltd. All Rights Reserved. A new suite of reports to help you look good to your clients

©2016 Distribution Technology Ltd. All Rights Reserved. There is an even bigger change coming Source: Deloitte Mobile UK, 2015 Percentage of UK adults

©2016 Distribution Technology Ltd. All Rights Reserved. Healthcare is in the middle of a revolution Source: Digital health in the UK. Deloitte for Office of life Sciences. September 2015

©2016 Distribution Technology Ltd. All Rights Reserved. Law is too Online dispute resolution in the US handles 60 million cases a year 14 Source: Civil Justice Council, Report, 2015 Dispute avoidance online evaluation informational Tier 1 Dispute containment online facilitation inquisitorial Tier 2 Dispute resolution online judges adversarial Tier 3

©2016 Distribution Technology Ltd. All Rights Reserved. Financial advice and planning is not immune Source: FCA Treasury, Financial Advice Market Review Call for input, October 2015

©2016 Distribution Technology Ltd. All Rights Reserved. You obviously feel the same Source: Dynamic Planner adviser user survey, 55 firms. December, 2015 What do you feel are the main benefits of providing online advice?

©2016 Distribution Technology Ltd. All Rights Reserved. But the same approach is not suitable for all clients and cases Simple low value Complex high value Engaged Not engaged

©2016 Distribution Technology Ltd. All Rights Reserved. And the volume of opportunities is significantly different too Simple low value Complex high value Not engaged Engaged

©2016 Distribution Technology Ltd. All Rights Reserved. And the volume of opportunities is significantly different too Simple low value Complex high value Engaged Not engaged Do it For Me PS I only have a small amount to invest, so your normal process will be unprofitable Do it For Me (DIFM) Do It Yourself(DIFM)

©2016 Distribution Technology Ltd. All Rights Reserved. DT’s Digitally Supported Advice roadmap Self-serve support Planner - driven engagement Not engaged Simple low value Complex high value Engaged

©2016 Distribution Technology Ltd. All Rights Reserved. Planner - driven engagement Self-serve support Planner - driven engagement Not engaged Simple low value Complex high value Engaged

©2016 Distribution Technology Ltd. All Rights Reserved. Planner-driven engagement: Experience questionnaire

©2016 Distribution Technology Ltd. All Rights Reserved. Client requests Planner-driven engagement: Risk profiling invitation module

©2016 Distribution Technology Ltd. All Rights Reserved. Send reminder Planner-driven engagement: Risk profiling invitation module

©2016 Distribution Technology Ltd. All Rights Reserved. Self-serve support Self-serve support Planner - driven engagement Not engaged Simple low value Complex high value Engaged

©2016 Distribution Technology Ltd. All Rights Reserved. Self-serve support: the problem 2-3 hours adviser 1-2 hours admin Fees: £350 - £450 minus Costs: £330 - £510 = Figures based on DT client research 2016: £150 per hour billable rate for advisers, £30 per hour administrator. Typical adviser charge 3% initial and 0.5% ongoing Platform Transaction Administration Advice Client discussion and basic fact find Research, write and check suitability letter Arrange business ID Verification Application forms, paperwork, chasing and admin Marginal to loss making!

©2016 Distribution Technology Ltd. All Rights Reserved. Dynamic Planner AccessAdvice will deliver your advice and use WealthConnect to submit transactions and monitor portfolios Platform Transaction Administration Access Advice app Self-serve advice Track transaction & documents Monitor portfolio WealthConnect Check and submit transaction Automated progress alerts from platform Dynamic Planner AccessAdvice TM Your: Brand Service levels Product Platform Investments Planning rules Suitability report Agency Back office Fees

©2016 Distribution Technology Ltd. All Rights Reserved. What will AccessAdvice do? New money I ISA New money II GIA PPP Existing arrangements Portfolio reviews Alerts Top ups Rebalances Switches Optimisation Pension consolidation Retirement income Simple low value Complex high value

©2016 Distribution Technology Ltd. All Rights Reserved. Self-serve support: Dynamic Planner AccessAdvice

©2016 Distribution Technology Ltd. All Rights Reserved. AccessAdvice will use WealthConnect to submit transactions and monitor portfolios 2-3 hours adviser 1-2 hours admin Platform Transaction Administration Advice Client discussion and basic fact find Research, write and check suitability letter Arrange business ID Verification Application forms, paperwork, chasing and admin 15 minutes Adviser/ paraplanner 30 minutes admin Fees: £ minus Costs: £50 = Profitable relationship from the start!

©2016 Distribution Technology Ltd. All Rights Reserved. AccessAdvice will open up a huge new addressable market for you Simple low value Complex high value Not engaged 15 million households with £1k - £50k to invest* Engaged In terms of time taken, I could see this going from 5 hours to 45 minutes work for us We have a lot of clients with ISAs, and would look to offer this to existing clients. It’s another string to our bow, and would help us with the £3-5k type of client. This would be good for 'reviving’ clients who have been dormant for some time - some firms have a lot of clients who may have since gone to other advisers, potentially being a missed opportunity. This would mainly appeal to younger clients and people leaving things to the last minute (often the same people!) - being able to do this online from an app would really help.

©2016 Distribution Technology Ltd. All Rights Reserved. Feedback: today! See the team today with iPads Answer questionnaire on feedback today Contact your account manager Participate in early adopter programme: Starting now Participate in adviser and consumer research and testing programme Influence design FAMR Launch with early adopters: later this year Next steps

©2016 Distribution Technology Ltd. All Rights dynamicplanner.com/bensblog Thank you