To be or not to be, a NIChE piece of software …

In the world of Financial Services, technology now plays an essential and key role to the delivery of Financial Advice. Whether it’s software or hardware you use on a daily basis, I think you would all agree that we have accepted and rely on it both personally and professionally whether we like it or not. For instance, the use of ipads (or equally good tablets) in our home have been banned from 7pm, for my job (and shopping) it is an essential tool, although doesn’t promote a healthy relationship when sat at opposite sides of the room not talking. I think this also relates when using tools with clients, whether providing detailed and in depth reports, instant valuations, or historic fund data, it all needs to be delivered with that personal touch.

I’m sure many of you will have seen recent articles relating to some extremely large mergers and buy outs of technology and back office systems within our sector whom somewhat dominate the market, but is there room for more smaller contenders to enter this space? With the huge range of products and tools available to Advisers, do you plough all your money into one solution? Do you use 100% of the features within that solution fully?  Or do you select niche pieces of software that purely focus on particular services or tasks to help you do your job effectively, and deliver the exact proposition you want to offer you clients?

I entered the world of Financial Advice back in 2008, which was quite possibly the worst time I could have chosen to do this. With the economic down turn, client review meetings were becoming increasingly difficult for Financial Advisers, with many clients caught by the severe downturn and their investments taking the brunt of the economies difficulties. Delivering the news to a client that their investments (in some cases) had fallen by up to 50% in value from your last review meeting, really isn’t an easy conversation to have. Although it is always pointed out that “the value of investments can go down as well as up, and clients may get back less than they invest”, I don’t think they ever truly believe that would be the case.

I repeatedly heard comments from our clients such as “why wasn’t I informed?” or “if only I had known I could have done something about it”. Clients really do believe that you are hawk eyed over their investments every single day, not actually out doing your day job! But it was these comments that got my tiny little brain thinking, clunking, ticking away like it hadn’t before, and I came up with “what if!?” (wait, wait let me explain further).

What if I could monitor the value of a client’s investment daily?

What if the client with the help of their Adviser, could apply profit and loss parameters to each investment plan, based on their individual objectives and fears?

What if their investment values were then compared daily against their set parameters?

What if this then formed a chargeable and additional service to our clients, where they would be alerted immediately, at the time parameters were breached and a discussion was arranged with their Adviser to review their position at that time?

I searched and searched for tools that offered this type service, I came across DIY portfolio management software for individuals, but when asked none of our clients were interested in entering and managing data themselves. There were ways to apply stop losses on fund performance, but this wasn’t specific enough and didn’t drill down deep enough to show how it effected the valuation of an individual’s plan. I could access some but not all valuations through a back office system, but a lot of the time many valuations came back as failed and that wasn’t accurate enough. So I began to create the bare bones of a system that did exactly what I wanted it to do, and I decided to offer the daily monitoring proposition to a select few clients to test the service.

Because this was extremely time consuming and went over and above their service agreement, I charged an additional fee, which was an easy to understand charging matrix based on the number of investment plans they wanted monitoring and their cumulative value. On average clients were paying between £50 and £100 per month, and I simply asked them to trial it for one year. At first I signed up five clients, this then increased to 15 and by the end of the first year I had signed up 37 clients which brought in an additional £25,000 to the practice. This was wonderful, but what I found most telling was that after visiting each client at the end of their 12 month contract, each and every single one of them wanted to continue with the service and still do to this day. So what had started as a little independent (and time consuming) back office function, had now turned into a service which had a proven demand. What better way to prove an ongoing and demonstrable service, than daily investment monitoring?

So here was my dilemma.

1) I knew I needed to automate and streamline the daily monitoring into software for Financial Advisers to use, but I’m no software developer.

2) I thoroughly researched, understood, and developed by business plan to get this idea where I wanted it to be, but unfortunately I didn’t have the funds needed to inject into the project.

3) Should I even bother, will I be eaten alive by all the top back office systems out there, with huge budgets to burn?

To be totally honest I very nearly didn’t continue with my idea, but the more I researched the market, the more I found interesting and extremely successful software solutions that had found their niche area and focussed on it, so I decided to go for it! I pitched my idea and business plan to finally secure the investment I needed, and approached some successful business connections whom have a wealth of commercial experience to help guide me along the right roots. The road has been full of pot holes, highs and lows, but mostly some extremely steep learning curves!

A few months ago we officially launched our bespoke, patent pending, investment monitoring solution to Financial Advisers and Wealth Managers and things are going extremely well. Our users are seeing tremendous benefits, as are their clients. And I’m happy to report that we also have commercial agreements and partnerships being rolled out to some large networks and platforms with more in the pipeline, who can see the great potential and wish to support and promote my small yet NIChE piece of software.

 

Thanks for reading,

Danielle Dacunha-Howarth

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4 thoughts on “To be or not to be, a NIChE piece of software …

  • Hi Paul, thanks for your comment.

    Let me not mislead you, I fully understand and support that investments are medium to long term and that they fluctuate, that is the nature of the beast. Daily monitoring simply helps Financial Advisers keep a more watchful eye over client investments, manage client expectations, and their appetite for loss. It is not there to instigate impulsive or ad hoc switching.

    Daily monitoring allows great benefits to Advisers and their clients, below are just a few:-

    1) Pro active approach – If a clients plan breaches a parameter (profit or loss) this allows you to speak to that client at a relevant time, to discuss the markets, their position and to simply demonstrate you are keeping them informed. This eliminates any nasty shocks when their annual reviews are due as you’ve kept them informed at times they have stipulated they want to know. I also believe that this truly satisfies the TCF outcomes three and five:
    – Consumers are provided with clear information and are kept appropriately informed before, during and after the point of sale.
    – Consumers are provided with products that perform as firms have led them to expect, and the associated service is of an acceptable standard and as they have been led to expect.

    2) Client peace of mind – By applying profit and loss parameters to an investment, your client knows that no matter what is happening in the markets or what the media is reporting, if you’re not getting in touch they are still within their comfort zones therefore no need to panic.

    3) Parameters are completely flexible – As we all know, the most important times in an investment are when the client goes into the market and when they want to realise the money. If a plan has performed well, has substantial growth and the client wanted to realise the plan soon you could apply closer parameters ensuring you were alerted if it began to decline at any point simply providing options to the client at that time. A couple of old articles I enjoyed reading were about not being afraid to lock in gains: http://bit.ly/h736XU & http://bit.ly/16NjmvR

    I totally agree with you that there is no need for you or the client to look at the movements every day, this will simply tick along in the background and do that for you.

    Sorry its a long reply,

    Danielle

    Reply
  • Hi Paul, thanks for your comment.

    Let me not mislead you, I fully understand and support that investments are medium to long term and that they fluctuate, that is the nature of the beast. Daily monitoring simply helps Financial Advisers keep a more watchful eye over client investments, manage client expectations, and their appetite for loss. It is not there to instigate impulsive or ad hoc switching.

    Daily monitoring allows great benefits to Advisers and their clients, below are just a few:-

    1) Pro active approach – If a clients plan breaches a parameter (profit or loss) this allows you to speak to that client at a relevant time, to discuss the markets, their position and to simply demonstrate you are keeping them informed. This eliminates any nasty shocks when their annual reviews are due as you’ve kept them informed at times they have stipulated they want to know. I also believe that this truly satisfies the TCF outcomes three and five:
    – Consumers are provided with clear information and are kept appropriately informed before, during and after the point of sale.
    – Consumers are provided with products that perform as firms have led them to expect, and the associated service is of an acceptable standard and as they have been led to expect.

    2) Client peace of mind – By applying profit and loss parameters to an investment, your client knows that no matter what is happening in the markets or what the media is reporting, if you’re not getting in touch they are still within their comfort zones therefore no need to panic.

    3) Parameters are completely flexible – As we all know, the most important times in an investment are when the client goes into the market and when they want to realise the money. If a plan has performed well, has substantial growth and the client wanted to realise the plan soon you could apply closer parameters ensuring you were alerted if it began to decline at any point simply providing options to the client at that time. A couple of old articles I enjoyed reading were about not being afraid to lock in gains: http://bit.ly/h736XU & http://bit.ly/16NjmvR

    I totally agree with you that there is no need for you or the client to look at the movements every day, this will simply tick along in the background and do that for you.

    Sorry its a long reply,

    Danielle

    Reply

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