Conference key note Ben Goss, CEO, DT

Ensuring Investment Suitability In a digital world 4th Annual Dynamic Planner Conference, 2016 Good morning ladies and gentlemen and let me add my own welcome to you all, its wonderful to see so many clients here in the same room – thank you for coming I am very excited today, we have something truly revolutionary to show you! Something that will literally be a force multiplier for your business But first, I want to take stock of where we are as a firm and as an industry

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%

Suitability remains a central focus for the FCA and industry 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 The regulator continues to have a laser like focus on suitability Since 2011 there have been a number of thematic reviews, including more recently TR16/1 on research and due diligence, which Rory Percival from FCA, will speak on later and TR15/12 looking at the suitability of investment portfolios in wealth management firms and private banks in which two thirds of firms were fell substantially short of FCA standards or needed to make improvements to meet those standards. Significant suitability fines and sanctions have been implemented over the last 4 years as we know Looking forward we also have to prepare for MiFID II which is expected to raise the bar again on knowing your client and ensuring suitable investment advice, particularly around investor experience. ©2016 Distribution Technology Ltd. All Rights Reserved.

What have we done to help in the last year? So with this backdrop, what have we done to help over the last 12 months? We have been busy and have launched and developed a number of really key services this year which help deliver our 3 brand promises

1,000+ downloads in 10 days At this conference last year we previewed the new iPad app to help advisers. When we launched in in April we had over 1,000 downloads in the first 10 days! Firms love the way it helps them accurately risk profile clients in an engaging way feedback includes: “Awesome”, “Splendid”, etc etc

30,000 searches each month and growing

£2bn in risk target managed funds and growing

Unique ACE Ratings launched in January Unique ACE Ratings launched in January. Adopted by Bankhall for their research service ACE ratings

Dynamic Planner portfolio risk breakdown and My Planning client view

A new suite of reports to help you look good to your clients

There is an even bigger change coming Percentage of UK adults Source: Deloitte Mobile UK, 2015

Healthcare is in the middle of a revolution Source: Digital health in the UK. Deloitte for Office of life Sciences. September 2015

Online dispute resolution in the US handles 60 million cases a year Law is too Online dispute resolution in the US handles 60 million cases a year Dispute avoidance online evaluation informational Tier 1 Dispute containment online facilitation inquisitorial Tier 2 Dispute resolution online judges adversarial Tier 3 Source: Civil Justice Council, Report, 2015

Financial advice and planning is not immune Source: FCA Treasury, Financial Advice Market Review Call for input, October 2015

You obviously feel the same What do you feel are the main benefits of providing online advice? Source: Dynamic Planner adviser user survey, 55 firms. December, 2015

But the same approach is not suitable for all clients and cases engaged Engaged Simple low value Complex high value

And the volume of opportunities is significantly different too Not engaged Engaged Simple low value Complex high value

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

DT’s Digitally Supported Advice roadmap Not engaged Self-serve support Planner - driven engagement Engaged Simple low value Complex high value

Planner - driven engagement Not engaged Self-serve support Planner - driven engagement Engaged Simple low value Complex high value

Planner-driven engagement: Experience questionnaire

Planner-driven engagement: Risk profiling invitation module Client email requests

Planner-driven engagement: Risk profiling invitation module Send reminder

Planner - driven engagement Self-serve support Not engaged Self-serve support Planner - driven engagement Engaged Simple low value Complex high value

Self-serve support: the problem Platform Transaction Administration Advice Client discussion and basic fact find Research, write and check suitability letter 2-3 hours adviser Marginal to loss making! Fees: £350 - £450 minus Costs: £330 - £510 = Arrange business ID Verification Application forms, paperwork, chasing and admin 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 1-2 hours admin

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

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

Self-serve support: Dynamic Planner AccessAdvice

Profitable relationship from the start! AccessAdvice will use WealthConnect to submit transactions and monitor portfolios Platform Transaction Administration Advice Client discussion and basic fact find Research, write and check suitability letter 15 minutes Adviser/ paraplanner 2-3 hours adviser Profitable relationship from the start! Fees: £100-200 minus Costs: £50 = Arrange business ID Verification Application forms, paperwork, chasing and admin 1-2 hours admin 30 minutes admin

AccessAdvice will open up a huge new addressable market for you 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.  We have a lot of clients with ISAs, and would look to offer this to existing clients. 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.   15 million households with £1k - £50k to invest* Not engaged It’s another string to our bow, and would help us with the £3-5k type of client.  Engaged Simple low value Complex high value  In terms of time taken, I could see this going from 5 hours to 45 minutes work for us

Next steps 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

bengoss@dynamicplanner.com @bengoss dynamicplanner.com/bensblog Thank you bengoss@dynamicplanner.com @bengoss dynamicplanner.com/bensblog