Quarterly Update to International IFA owners

Presented by Just Service Global: offering a technology partner and network solution to International IFA firms:

1. Platforms can offer more than just low costs

Technology can help alert advisers when their clients really need them.

Fund platforms have become a vital part of the financial advice space. They have been battling it out to get attention from advisers given their past dependency on life insurance products and tools provided by insurance companies e.g. adviser portals. These are no longer sufficient.

How do platforms, including networks with platforms, differentiate themselves in a world where it has become increasingly important for business owners to offer their advisers more product/service solutions?

New age platforms arguably are now the most important thing that will ensure survival, let alone growth, including lower admin costs and deliver more value for clients and advisers.

In the past, advisers can handle realistically between 50 to 70 clients. With the right platform this can be 100 or even 150 clients. Platforms help advisers to be more productive. It will increasingly have a massive impact on an industry who currently average less than 20 basis points on their total assets under management (clearly not sustainable at that low level).

Each owner needs to pick a platform that will best serve them in terms of efficiency and value to both advisers and clients.

The real efficiencies come from the software itself not about margins.

If you have access to the right technology you can innovate and create additional value, efficiencies and more exit strategies for the owner.

1. How technology can help manage client portfolios

Some interesting comments from Yodelar UK, a portfolio manager in the UK.

They regularly review portfolios for investors and find 9 of 10 contain poor performing funds, funds that consistently perform in the worst 25% of the sector.

Most investors are unaware they are invested in poor performing funds and that inefficient, poor performing fund managers may dramatically affect their future wealth.

New age applications can alert an adviser to poor performing funds held within client portfolios and give them the opportunity to demonstrate how their service can now help add value (making the charging or advisory fees much easier to justify).

Yodelar also reviewed almost 8000 pension funds, 4300 life funds and 2400 unit trust funds. Each of these funds were then provided with a performance rating based on how they performed within their sector compared with all other same sector competing funds.  St James Place had 117 funds and 93 funds that showed low ratings. ( where they consistently ranked worse than 50% of competing funds-usually bottom quartile: this means 80% of their funds underperformed).

Abbey Life in second place followed by HBOS and Lloyds TSB.

1. What are the potential benefits of joining a network?

It can be advantageous in particular for smaller firms because a network would usually handle both regulatory and legal responsibilities necessary to continue to provide advisory services For individuals running firms they need to be honest in assessing their firm’s current capabilities and competencies and consider their weaknesses – particularly relevant in order to stay relevant (and of value) to advisers and clients.

 A quick summary of the benefits of becoming part of a network:

Firstly, the benefits you would expect any professional network to provide:

- Licensing umbrella = more certainty of retaining all revenues from institutions

- Backroom administration = lower admin costs

- regular communication to clients to keep them engaged = more client engagement for up and cross-selling

- new business processing 

- recurring commissions/fee tracking and payment

- access to a broader range of products

The Just Service Global Network has all of these capabilities plus exclusive to our partners are:

- model portfolios (regulars, singles and open architecture bonds/fund platforms)

- monthly valuation update to clients including uploading our mobile app

- regular blogs and other marketing content to clients

- online partner Dashboard - includes two click view to any client valuation and alerts

- online portfolio review app (to lift return on your AUM) - including auto-populated switch forms following portfolio changes

- easy tracking of client review histories

……..and more applications currently being built

As always talk to your adviser within the Just Service network if you would like information or otherwise review your savings, investment or pension plans.

For all enquiries email info@justserviceglobal.com

Regards

The Just Service Client Service Team

All content provided is for informational purposes only. Just Service makes no representations as to the accuracy or completeness of any information contained or found by following any link. Just Service will not be liable for any errors or omissions in this information nor the availability of it. Just Service will not be liable for any losses, injuries, or damages from the display or use of this information. This policy is subject to change at any time.

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Megatrends: The forces shaping our investment decisions

Source: Blackrock

Megatrends are powerful, transformative forces that can change the trajectory of the global economy by shifting the priorities of societies, driving innovation and redefining business models – all of which have an impact on investment decisions.

The 5 megatrends that have the ability to shape the future include:

1. Technological breakthroughs

Disruptive innovation is most likely to emerge in two scenarios; (i) new solutions are developed to resolve a significant constraint or challenge, or (ii) new competitors are attracted to industries with large profit pools and high returns.

Consider the advent of electric vehicles, e-commerce, solar panels, robotics, blockchain, cloud computing, streaming, smart grids and many other modern-day innovations. In each case, engineers and entrepreneurs are aiming to capitalise on the need for a new solution or a better alternative in existing markets.

2. Demographics and social change

Changes in global demographics will bring significant challenges and opportunities for societies and businesses. Italy and Germany lead the way in Europe with the median age of their populations at 47.9 and 46.6 years (only behind Japan at 48.2 years). In Western Europe, 1 in 5 people are older than 65 years of age and this is expected to rise to 1 in 4 people in the next decade. These trends are likely to slowly but steadily change the outlook for household spending (catering for older consumers), inflation rates, economic growth and government policy (the US already spends over 18% of GDP on healthcare). Ageing and the resulting decline in the labour force will hence require dramatic social and technological changes.

3. Emerging global wealth

In the last twenty years, developing economies have been lifted by the rising tide of globalisation and manufacturing shifting to Asia. Two decades of unprecedented growth has lifted China’s per capita GDP from a meagre 8% of US per capita GDP in 2000 to roughly 30% this year. This rapid growth has been enabled by significant infrastructure investments, support for an export-focused manufacturing base and increased spending on innovation (research & development or R&D). In turn this has resulted in persistent growth in household incomes; the World Bank notes that China alone is set to add one billion people to the global middle class between 2005-2030. 

4. Climate change and resource scarcity

An expanding population and the rising demand for food, energy and materials continue to strain the finite resources of the planet. The need for solutions that improve energy efficiency, lower food waste and provide alternatives to scarce resources has never been greater. In 2018, global emissions continued their march higher growing 1.7% yoy, and the US National Climate Assessment report noted that sea levels are now rising twice as fast as 25 years ago. Since the social and economic consequences of climate change are substantial, investing in energy efficiency and renewable energy has become ever more so important.

5. Rapid urbanization

With people in the world living in cities more than ever before – according to McKinsey as of October 2018, the top 50 cities account for 8% of global population – cities’ share of global growth is rising. As cities grow large, they require significant infrastructure, including communication networks (e.g. 5G, fibre), transit and transportation (e.g. metro, bridges), social infrastructure (e.g. hospitals, schools) and housing. This was a key driver of commodity demand and fixed investments in the last 10-15 years as China and other developing economies industrialised rapidly and millions of people migrated to cities.

Translating megatrends into investment themes

We strongly urge you to talk to your Just Service adviser on a regular basis as these trends are an important consideration when reviewing your investment portfolios.

For all enquiries email info@justserviceglobal.com

Regards

The Just Service Client Service Team

All content provided is for informational purposes only. Just Service makes no representations as to the accuracy or completeness of any information contained or found by following any link. Just Service will not be liable for any errors or omissions in this information nor the availability of it. Just Service will not be liable for any losses, injuries, or damages from the display or use of this information. This policy is subject to change at any time.

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