CloudCamp Chicago Nov 2014 "Fintech" theme. Hosted by TechNexus and CohesiveFT Lightning talk "Trends and Transparency in Investment Advisory" by Aziz Lalljee, Co-founder of Finom

1. "Trends and Transparency in
Investment Advisory"
!
Aziz Lalljee,
Co-founder of Finom
!
!
Tweet: @FinomInc
#cloudcamp
Sponsored by
Hosted by
#cloudcamp
@CloudCamp_CHI

2. Aziz Lalljee
Co-CEO & Co-Founder
Trends and Transparency in
Independent Investment Advisory
CloudCamp Chicago
November 3rd, 2014

3. Investment Advisory Industry
Technology as Enabler: Independents
Technology as “Disruptor”: Robo-Advisers
Technology MIA: Adviser Selection and Analytics
Finom: Transparency and Personalization

4. Total US Household Investable Assets ($27.4 T)
$100K - $500K:
$4.6 T
$500K - $2M:
$8.1 T
< $100K:
$1.6 T
> $20M:
$10M - $20M: $2.1 T
$2.1 T
$5M - $10M:
$3.1 T
$2M - $5M:
$5.7 T
TO ADD:
All Households
$27.4 T
US GDP:
$16.8 T
Source: Cerulli Associates, 2012; Morningstar, 2013 Source: WorldBank.org

5. The Managers
Wirehouses (40%)
Broker/Dealers (34%)
Independents (17%)
Other (9%)
UBS, Wells Fargo, Morgan
Stanley, Merryl Lynch
LPL, Raymond James, etc.
Registered Investment
Advisers
Insurance and Bank
Broker/Dealers
Source: Cerulli Associates, 2012; Morningstar, 2013

6. The Independents
$2.2 - $3.1 T
Double Digit
Growth
Growth Drivers
Structural
Tailwinds
 Owner v. Employee
 Asset Management v.
Asset Gathering
 Fees v. Commissions
(Services v. Products)
 Independent, Fee-only
Fiduciary: Gold Standard
Large Institutions:
Integrated, Mainframe
Legacy Systems
Independents:
Dispersed, Smaller,
Fragmented, Early
Adopters
Source: RIA Database; Morningstar, 2013
Technological
Implications

7. Technology As Enabler of Independents
To Go Independent…
Wide variety based on services and sophistication
Range from: RIA In A Box (outsourced compliance); TAMPs; HighTower (bespoke platform)
Improve Practice Management…
Trade Execution and Rebalancing
Financial Planning
CRM
Performance Reporting
Integrations and Linkages

8. Technology As “Disruptor”: Robo-Advisers
Source: iconiccanvasart

9. Robo-Advisers
Issues?
Sustainability: Valuations
Survival: Asset Flight
 No Financial Planning or
Auxiliary Services
No Personal Relationship
New Models?
 Proprietary v. White Label
 Unbundling of Services
 Hybrid Advisers
 New Entrants (Advisers,
Funds, Tech Companies)
Still Very Early
A Sense of Proportion?

10. Technology MIA : A d v i s e r S e le c t ion and Analytics
?

11. Satisfaction Rates For Investment Advisers…
2%
% That Would
Recommend
% Satisfied
1 - My-Way Investment Advisors Survey
2 - Boston Consulting Group
30%
% Satisfied
(Females)
3 - Tiburon Report
44%

12. $1,000,000
$750,000
$500,000
$250,000
$0
The Value of Good Advice
Today 15 Years 30 Years

18. All Advisors Are Not Created Equal

19. Thank you!
contact@finom.com
https://www.finom.com
Aziz Lalljee
Co-CEO & Co-Founder
CloudCamp Chicago
November 3rd, 2014