Ton Kentgens Ortec Finance - Verdict · - Assessment client investment goals - Translation into...

Ton KentgensOrtec FinanceTon KentgensOrtec Finance

Private Banking InternationalLondon, 3 June 2015

Our company

Ortec Finance is a global provider of solutions for measuring and managingboth long- and short-term risk and return for Institutional and Private investors

Founded in 1981 Global and long-standing clients manage over $ 2 trn in AuM Independent – 100% owned by employees 180 employees

International Offices- Netherlands – Rotterdam, Amsterdam- United Kingdom – London- Switzerland – Pfäffikon SZ

Ortec Finance is a global provider of solutions for measuring and managingboth long- and short-term risk and return for Institutional and Private investors

Founded in 1981 Global and long-standing clients manage over $ 2 trn in AuM Independent – 100% owned by employees 180 employees

International Offices- Netherlands – Rotterdam, Amsterdam- United Kingdom – London- Switzerland – Pfäffikon SZ

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Ortec Finance is a global provider of solutions for measuring and managingboth long- and short-term risk and return for Institutional and Private investors

Founded in 1981 Global and long-standing clients manage over $ 2 trn in AuM Independent – 100% owned by employees 180 employees

International Offices- Netherlands – Rotterdam, Amsterdam- United Kingdom – London- Switzerland – Pfäffikon SZ

Our markets and solutions

SOLUTIONSINSTITUTIONAL CLIENTS

PRIVATEWEALTH REAL ESTATE

PENSIONS &ASSET MGMT.

SOVEREIGNWEALTH INSURANCE

INVE

STM

ENT

DEC

ISIO

N P

RO

CES

S ALM BALANCE SHEET STRATEGY PRIVATE ALM STRATEGIC ADVICE

INVE

STM

ENT

DEC

ISIO

N P

RO

CES

S ALM

ECO

NO

MIC

SC

ENA

RIO

GEN

ERA

TIO

NR

EAL

WO

RLD

& R

ISK

NEU

TRA

L

BALANCE SHEET STRATEGY PRIVATE ALM STRATEGIC ADVICE

STRATEGIC ASSET ALLOCATIONGOAL-BASED

FINANCIALPLANNING

FINANCIALPLANNING

INVESTMENT PLANINVESTMENT CONSULTING

STRATEGICASSET

ALLOCATION

PORTFOLIOPLANNINGPORTFOLIO

CONSTRUCTION

ASSETMANAGEMENT

RISK

AMBITION COST

3

INVE

STM

ENT

DEC

ISIO

N P

RO

CES

S

ECO

NO

MIC

SC

ENA

RIO

GEN

ERA

TIO

NR

EAL

WO

RLD

& R

ISK

NEU

TRA

L

ASSETMANAGEMENT

MONITORING(EX-ANTE)

RISK MANAGEMENT & MONITORINGPROJECT

CALCULATIONSTREASURY

(EX-POST) PERFORMANCE AND RISK MEASUREMENT & ATTRIBUTION VALUATIONS

Some important global trends in the wealthmanagement market

4

HNWI growth accelerates, reaching newrecord levels

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HNWI growth accelerates, reaching newrecord levels

6

Top four markets generate majority of HNWIgrowth in 2013.

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HNWI’s increase alternative investments

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Overall, the home bias of investors isdecreasing

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A new landscape: a shift from distributingproducts to goal based advice

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Product orientedfinancial advice

Shift in financial advice

Client orientedfinancial advice

Advice and monitoring of the client situation:- Inventory client situation- Cash flow planning- Assessment client investment goals- Translation into optimal strategic asset allocation- Portfolio construction and optimizing- Ongoing monitoring off feasibility of goals- Active adjustments to investment strategy

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Advice and monitoring of the client situation:- Inventory client situation- Cash flow planning- Assessment client investment goals- Translation into optimal strategic asset allocation- Portfolio construction and optimizing- Ongoing monitoring off feasibility of goals- Active adjustments to investment strategy

What do you need for this shift?

Insight into risk and return on a client level using real worldeconomic scenarios in combination with a holistic approach.

Multi disciplinary approachthat considers a broad spectrumof variables.ImprovingManagement of expectations

Deposits

Insight into risk and return on a client level using real worldeconomic scenarios in combination with a holistic approach.

Multi disciplinary approachthat considers a broad spectrumof variables.ImprovingManagement of expectations

Macroeconomicrealistic

scenarios

Macroeconomicrealistic

scenarios

DepositsDeposits

Assetallocation

Assetallocation

Allocationstrategy

Allocationstrategy

Interestrate riskInterestrate risk

GoalsGoals

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Macroeconomicrealistic

scenarios

Macroeconomicrealistic

scenarios

Allocationstrategy

Inflationrisk

Inflationrisk

Currencyrisk

CurrencyriskCostsCosts

TaxesTaxes

Interestrate risk

How can compliance add value?

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HNWI preferences: major developments

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The risk profiling, advice and monitoringprocess is as strong as its weakest link

1. A UNIFORM RISK & NEEDSASSESSMENT AT EVERY BRANCH,

LEADING TO AN OPTIMAL RISKPROFILE PER GOAL OR SET OF

GOALS?

WHEN A CLIENT APPROACHES ABANK OR ADVISOR, DOES HE OR

SHE GET…

1. A UNIFORM RISK & NEEDSASSESSMENT AT EVERY BRANCH,

LEADING TO AN OPTIMAL RISKPROFILE PER GOAL OR SET OF

GOALS?

2. UNIFORM ASSET ALLOCATIONIN EVERY BRANCH, BY EVERY

ADVISOR?

4. CONSISTENT MONITORING OFPORTFOLIO RISK AND

REACHABILITY OF GOALS?

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3. GOAL BASED ADVICE,PORTFOLIO CONSTRUCTION

FOLLOWING RULES?

Willingness and ability to take risk

How much risk is client willing to take?How much risk is client willing to take? How much risk is client able to take?How much risk is client able to take?

Willingness Ability

measured with use of questionnaire(the emotional risk willingness)

measured with use of questionnaire(the emotional risk willingness)

measured with use of scenarios(risk, return and feasibility)

measured with use of scenarios(risk, return and feasibility)

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Risk profile of the portfolio, strategic asset-allocation needs to be in line with the riskprofile of the client

Risk is also not reaching goals: a savings account is not always the best alternative Risk profile of the client: ability to take risk and the willingness (restriction) to take risk

Suitability connected to portfolios instead ofproducts

Risk profile of the portfolio, strategic asset-allocation needs to be in line with the riskprofile of the client

Risk is also not reaching goals: a savings account is not always the best alternative Risk profile of the client: ability to take risk and the willingness (restriction) to take risk

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Importance of monitoring

Have the appropriate arrangements in place to meet the requirements on an on-goingand consistent basis for any client and irrespective of the distribution channel used.

Maintaining adequate and update information about the client: adopt procedures toregularly update information (monitoring).

Have the appropriate arrangements in place to meet the requirements on an on-goingand consistent basis for any client and irrespective of the distribution channel used.

Maintaining adequate and update information about the client: adopt procedures toregularly update information (monitoring).

“Who to contactwith priority?”

Insight into the entire client base

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Insight into individual clients

And how can digital add value?

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Preferences of HNWI clients

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Despite digital, HNWI’s prefer to get advicein person

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HNWI’s propensity to leave a firm if thechannel experience is not integrated

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Support the advisory journey with adedicated client portal…..

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…with up to date information on goals

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Summary:

• Goal Based advisory, guidance and execution only• Fully compliant processes• Digital, omni channel approach

(U)HNWI

PRIVATE BANKING

MASS AFFLUENT

RETAIL MARKET

SELF-DIRECTED VALIDATORS ADVICE SEEKERS DELEGATORS

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(U)HNWI

PRIVATE BANKING

MASS AFFLUENT

RETAIL MARKET

The Netherlands, RotterdamBoompjes 40, 3011 XB RotterdamP.O. Box 4074, 3006 AB RotterdamTel: +31 (0)10 700 50 00Fax: +31 (0)10 700 50 01E-mail: info@ortec-finance.comWeb: www.ortec-finance.com

Thank you!

Ton Kentgens

United Kingdom, London23 Austin Friars, London EC2N 2QPTel: +44 (0)20 3178 39 13Fax: +44 (0)20 3178 61 64E-mail: info@ortec-finance.comWeb: www.ortec-finance.co.uk

The Netherlands, AmsterdamBarajasweg 10, 1043 CP AmsterdamTel: +31 (0)20 700 97 00Fax: +31 (0)20 700 97 01E-mail: info@ortec-finance.comWeb: www.ortec-finance.com

Switzerland, PfäffikonPoststrasse 4, 8808 Pfäffikon SZTel: +41 (0)55 410 38 38Fax: +41 (0)55 410 80 36E-mail: info@ortec-finance.comWeb: www.ortec-finance.ch

+31655874126

Ton Kentgens

ton.kentgens@ortec-finance.com

Global Business Development

Private Wealth Management

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Switzerland, PfäffikonPoststrasse 4, 8808 Pfäffikon SZTel: +41 (0)55 410 38 38Fax: +41 (0)55 410 80 36E-mail: info@ortec-finance.comWeb: www.ortec-finance.ch