european wealth management technology vendors€¦ · temenos (triple ’a plus with back office...

EUROPEAN WEALTH MANAGEMENT TECHNOLOGY VENDORS EVALUATING FRONT-TO-BACK OFFICE TECHNOLOGY

Alexander Camargo

This authorized reprint contains material excerpted from a recent Celent report profiling and evaluating 13 different wealth management platforms with front to back office functionality. The full report is 96 pages long. This report was not sponsored by Objectway Financial Software in any way. This reprint was prepared specifically for Objectway, but the analysis has not been changed. from the full report. For more information on the full report, please contact Celent at www.celent.com or [email protected].

CONTENTS

Executive Summary ............................................................................................................ 1

Introduction.......................................................................................................................... 2

Research Methodology ....................................................................................................... 4

Front-to-Back Office Vendors .......................................................................................... 4

Criteria for Participation ................................................................................................... 5

About the Profiles ................................................................................................................ 6

Objectway Financial Software ............................................................................................. 7

Objectway Functionalities and Technology ....................................................................... 11

Technology, Delivery, and Implementation ................................................................... 11

Partnerships .................................................................................................................. 12

Asset Classes, Product Support .................................................................................... 12

CRM and Account Aggregation Functionality................................................................ 13

Financial Planning Support............................................................................................ 14

Plan Generation ............................................................................................................. 16

Portfolio Management ................................................................................................... 17

Trading, Compliance, and Administration ..................................................................... 18

Back Office .................................................................................................................... 19

Self-Directed Functionality and Mobility ........................................................................ 20

Celent’s ABCD Vendor View and the XCelent Awards ..................................................... 22

XCelent Awards ............................................................................................................. 23

XCelent Technology and XCelent Functionality ............................................................ 23

XCelent Customer Base and XCelent Service .............................................................. 23

Looking Forward ............................................................................................................... 25

EXECUTIVE SUMMARY

This report examines the leading European vendors of front-to-back office platforms. The following vendors participated in the study: Advent Software, Bravura, BSB, Comarch, FNZ, GBST, Objectway Financial Software, Polaris FT, PROFILE Software, SEI, Temenos (Triple ’A Plus with back office support from T24), and Third Financial.

A wealth management platform seeks to provide the infrastructure to support wealth management operations and processes across the front, middle, and back offices. Celent has identified 11 components that comprise a wealth management platform. Front office components support the advisory process, from acquisition to ongoing maintenance and retention, in a single workflow. These components include client relationship management (CRM), financial planning, portfolio management, and portfolio monitoring. Reporting straddles across front office and back/middle office operations. Middle/back office components focus on the advisor’s link to the home office and provide functionality support for investment managers, risk managers, and operations staff. Key components include reporting, portfolio construction (analytics and modeling), model administration, workflow management, compliance, document management, and central data repository.

The report includes in-depth profiles of each vendor (including a diagram and a screen shot for most), comparative tables of the product, and an assessment of the vendors using Celent's ABCD evaluation model. The report also names the winners of the XCelent Awards 2013.

XCelent Breadth of Functionality: Objectway

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INTRODUCTION

The European wealth management industry continues to evolve in the face of more stringent regulations, slow (and in some cases, contracting) economic growth, increased client demands, an increasing number of channels, and an increased focus on risk. While some progress has been made to regain client confidence, much of the firms’ focus today is to implement strategies that will help them retain clients and high value advisors. It is no doubt a very competitive environment for wealth management firms, and differentiation will be key to survival. The ability for firms to change their business models, customer segmentation strategies, and service proposition will strongly contribute to their success in retaining clients and expanding client relationships.

In the face of these challenges, wealth managers have focused on lowering costs and reducing turnaround times, while improving efficiency and creating a holistic view of clients. A pillar of this strategy is integration of data, channels, people, and processes.

As a result of these market trends, wealth managers have renewed interest in wealth management platforms. A wealth management platform seeks to provide the infrastructure to support wealth management operations and processes across the front, middle, and back offices. Celent has identified 11 components that comprise a wealth management platform, depicted in Figure 1. It is important to note that a selected wealth management platform may not necessarily have full native functionality across all components. A key feature of the platform is its open architecture, which enables the platform to integrate with third party and in-house solutions so that the entire advisory process is supported. Thus, the underlying infrastructure will provide an integrated workflow, despite the presence of several third party solutions.

Platforms allow administrators and enterprises to manage different channels in a consistent and streamlined manner through entitlements and permissions. This channel management and administrative functionality enables a unified experience for the home office, advisors, and end investors. Front office components support the advisory process, from acquisition to ongoing maintenance and retention, in a single workflow. These components include client relationship management (CRM), financial planning, portfolio management, and portfolio monitoring. Reporting straddles across front office and back/middle office operations. Middle/back office components focus on the advisor’s link to the home office and provide functionality support for investment managers, risk managers, and operations staff. Key components include reporting, portfolio construction (analytics and modeling), model administration, workflow management, compliance, document management, and central data repository.

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Figure 1: Wealth Management Platform Components

Source: Celent

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RESEARCH METHODOLOGY

Starting in April 2013, Celent conducted a study on the European wealth management vendor market. Celent focused on major trends, technology and functionalities, and client preferences. The survey consisted of over 40 questions covering the following topic areas:

Client types: Retail banks, private banks, brokerages, family offices, etc.

Firm strategy and how client reporting fits into their overall offering.

Regional presence.

Solution technology and functionality.

Market trends and future enhancements.

FRONT-TO-BACK OFFICE VENDORS This report will focus on the front-to-back office platform providers. Thus, Table 1 provides the list of vendors considered in this report. Although most of these vendors offer a modular solution whereby the front office functionality is marketed and can be sold on a stand-alone basis, Celent has grouped all vendors that offer both front and middle/back office vendors.

Table 1: Front to Back Office Vendors

CATEGORIZATION FIRM NAME PRODUCT NAME

Front-to-Back Office Vendors Advent Software APX, Moxy, and the associated products

Bravura Sonata

BSB Soliam

Comarch Wealth Management Platform

FNZ FNZ Wealth

Focus Solutions focus:360° Wealth Management

GBST GBST Composer

Objectway Financial Software Objectway Financial Suite

Polaris FT Intellect Wealth

PROFILE Software IMS Plus

SEI SEI Wealth Platform

Temenos AG Triple ’A Plus combined with T24

ThirdFin Tercero Software Platform

Source: Celent

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A few items of note:

Not included in this report are Pulse Software and Pershing, given that they did not participate in the study this time around.

CRITERIA FOR PARTICIPATION Celent used the following criteria for inclusion as a front office provider for this report:

All vendors must have platform product that fits into the categorization as defined and outlined in the previous sections.

Participating vendors must provide a front office solution that is sold on a stand-alone basis. Wealth management vendors offering front office capabilities integrated into a wealth management platform with middle and back office support have not been considered for this report. Although some front-to-back office vendors can sell their front office component on a stand-alone basis, these vendors are still considered “Front-to-Back Vendors” and will be featured in a separate report.

Must support multiple components within the front office. That is to say, vendors who provide merely one component of the front office (for example, portfolio management, or CRM), are not included. Thus, point solutions are not included.

Existence of live clients. All participating vendors must have at least two clients (one in beta and one live, at minimum). Since this report focuses on the North American market, vendors must have at least one North American client.

Target advisors and retail end users. All vendors must target advisors and retail end clients with their CRM tools, though participating vendors may also target institutional clients.

Web-based capability. All participating vendors must have Web-based tools.

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ABOUT THE PROFILES

Each of the profiles presents a Celent summary of the vendor and a description of the products’ customer base, modules and functionality, technology, implementation and services, and pricing information. Following the individual vendor profiles, a Comparative Analysis section contains 20 tables depicting the attributes of all the solutions. A detailed list of vendors profiled is shown in Table 2.

Table 2: Basic Information

VENDOR HEADQUARTERS PRODUCT NAME

Advent Software San Francisco, CA; European headquarters in London, UK

APX, Moxy, and the associated products

Bravura Sydney, Australia Sonata

BSB Louvain-la-Neuve, Belgium Soliam

Comarch Krakow, Poland Wealth Management Platform

FNZ Edinburgh, UK FNZ Wealth

Focus Solutions Leamington Spa, UK focus:360° Wealth Management

GBST European Headquarters: London, UK

GBST Composer

Objectway Financial Software Milan, Italy Objectway Financial Suite

Pershing London, UK Variety of technology and operations support.

Polaris FT Chennai, India Intellect Wealth

PROFILE Software Athens, Greece IMS Plus

Pulse Software Surrey, UK Symphony

SEI Oaks, PA SEI Wealth Platform

Temenos (Triple ‘A Plus + T24)

Geneva, Switzerland Triple ‘A Plus, PWM T24

ThirdFin London, UK Tercero Software Platform

Source: Celent, vendor questionnaires

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OBJECTWAY FINANCIAL SOFTWARE

Founded in 1990, Objectway is headquartered in Milan, Italy, and has around 500 employees globally. Objectway is a global provider of technology for investment management organizations, with clients ranging from single family offices to global banks. The vendor’s European client base is diverse in terms of geographic distribution, and Objectway has penetrated the Benelux, the UK, Western Europe, Mediterranean countries, Central Europe and Russia.

In December 2012, Objectway purchased eXimius, a web-based front office investment management system that supports discretionary services and specializes in portfolio management and analytics. This new purchase complements Objectway’s pre-existing Private Wealth Management Suite and the integration of eXimius into the existing platform has led to a repositioning and rebranding of Objectway’s wealth management technology offering. Objectway now offers a front-to-back office, multichannel wealth management platform, entitled Objectway Financial Suite. The platform can be offered in a modular fashion, utilizing the underlying solutions, or integrated to cover a full range of functionality that can support both discretionary and advisory wealth management services. At the end of 2012, Objectway has delivered a new set of products, named “Objectway Wealth Apps,” to support the mobile strategy of wealth firms and financial institutions. Wealth Apps covers the whole advisory process, from client prospecting to financial planning and investments execution, delivering on smartphones and tablets specific apps with functionalities tailored for advisors’ and end users’ needs.

Figure 2 provides an overview of the platform, showing potential users of each individual suite and of the entire platform.

Figure 2: Objectway Financial Suite

Source: Objectway

InvestmentManagers

OFSADVICE

OFS eXimius

PORTFOLIO MANAGER

REP

OR

TING

WEA

LTH A

NA

LYTIC

S

WEALTH APPS

WEALTH PORTAL

OBJECTWAY FINANCIAL SUITE

Advisor Studio Client Active Desk

Client Portal DeskAdvisor Portal Studio

Risk Managers

Portfolio Managers

Clients

OFS BACK OFFICE OPERATIONS

OFSCORE

Marketing

Relationship ManagersPrivate Bankers

Relationship ManagersPrivate Bankers

Operations Manager

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The following is a brief description of each component of the platform. As noted already, each of these components is branded individually and can be sold on its own, but can also be sold as an integrated part of the platform. Celent will not endeavor to fully describe every feature of the suites, but instead highlight major components.

OFS Advice. This suite is a unified multichannel platform that covers the front office advisory process for relationship managers, private bankers and other advisors in an integrated workflow. From a functional component perspective, it is comprised of the following:

CRM: Working from the start of the advisory process, users have access to prospect management tools, and a guided client onboarding workflow. The system also has contact management, and search/filter capabilities.

Client Profiling and Client “Diagnosis”: Here advisors collect information from their clients around income, expenditures, goals, cash-flow, risk profiles, and any product constraints. In this component, users also conduct cashflow analyses, wealth projections and forecasts, real estate analysis.

Client Financial Planner: Once the “diagnosis” is completed, the advisor creates multi-goal financial plans. The financial planning tools that incorporate both goals-based and cash-flow based planning, as well as goal prioritization. The component features What-if Scenario building for forward and back-testing as well as Monte Carlo Simulation.

Asset Allocation and Product Picking: This component is where portfolio construction occurs. It includes proposal policy templates, product lists, constraint management, model rebalancing, tax optimization, “optimized product picking,” ultimately leading to the proposal generation process. The proposal can be both forward and back-tested.

Compliance and Suitability Engine: The engine sits across the financial planning and product picking process to complete the necessary suitability checks for portfolios and proposals.

Advice Execution: Once the proposal has been generated, this system features the trade order list generation and sends the orders to order management systems. Users can check restraints, accept or reject proposals, add or substitute securities, and rebalance.

Client Portfolio Advice: Provides a dashboard view of assets and liabilities. Users can conduct performance analysis, risk and exposure analysis, cash flow forecasting, and stress tests on the portfolio.

Goals Monitoring and Alerts: These components conduct compliance and suitability monitoring, portfolio performance monitoring, goal probability success monitoring in single or bulk cases. Additionally, compliance alerts and alerts to CRM systems can be configured.

Reporting: The component includes report templates, custom reporting tools for building new templates, drill down abilities, and management dashboards.

The platform incorporates different levels of sophistication so that it is configurable to be able to serve different market segments and different advisory workflows product catalogs and service levels. Given its functionalities, the suite is suited for advisory services, as opposed to discretionary lines.

OFS eXimius Portfolio Manager. This suite features middle office portfolio construction, performance and risk analysis, as well some front office reporting tools. As such, the functionality is geared towards advisors, as well as portfolio management, risk management, and compliance staff. Similar to OFS Advice, this suite is composed of various features in an integrated workflow. This suite’s portfolio management functionality is strongly positioned for discretionary wealth management, although it can support

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advisory and execution only segments as well. As such, it can serve the Mass Affluent to the UHNW customer segment.

The core components of the system include portfolio management, flexible modeling and benchmarking tools, performance and drill-down analysis tools, performance decomposition and attribution, risk analysis and portfolio sensitivity, tax management (lot selection), compliance management, simulation, drift analysis and rebalancing, a query engine and decision support, alerts, order generation and blotter support, and an integrated CRM. The system includes single and bulk simulations as well as automated portfolio rebalancing, automated and manual order generation. The CRM system provides fee management, campaign management, segmentation, prospect management, contact management tools. The interface is based around a customizable user dashboard. This flexible dashboard includes a homepage that allows for task management, messaging, note taking, and customization of the GUI.

OFS Core is a new plug-in integration layer between OFS Advice and eXimius. Objectway has finalized the capability of starting the advisory process (using OFS Advice) on an existing portfolio in OFS eXimius Portfolio Manager. Therefore if an end client has subscribed to a financial planning advisory service/account, it will be possible to start a multi-goal financial planning/investment planning process. This process will generate a list of recommendations/orders that will be seamlessly sent to the eXimius order blotter to be managed. Thus, the advisor can execute a deep review and portfolio analysis on eXimius after completing the planning steps in OFS Advice. In essence, OFS Core allows data to flow from OFS eXimius Portfolio Manager into OFS Advice to start the advisory process, or vice versa—data would flow from OFS Advice to eXimius to complete the order management step. With OFS Core, Objectway’s customers are able to integrate the OFS Suite and leverage two integrated best-of-breed solutions for discretionary, portfolio management, financial planning and advice.

Wealth Analytics. Integrated into OFS Advice, OFS eXimius Portfolio Manager, and the back office, this product provides tools for advisors, investment/portfolio managers, marketing staff and risk managers. It features reporting functionality, including a set of templates and template design tools for creating personalized (by advisor or by client, or by configured group) reports, as well as alerts and user dashboards. Reports can be pushed to the client portal, emailed, printed, and created either on an ad hoc basis or via batch processing. The analytics module features administrative and management level reporting, as well as reports for advisors to view team and personal performance, budgets, fees and commissions, etc. Users can conduct analyses on groups of clients or individual clients, analyses by product, by advisor, by asset class, and by risk profiles. Further breakdowns include organization and geography views and transaction dates. The reports can be pre-packaged and delivered on an ad hoc basis, drill-down and drill-through views, and user entitlements. It includes an easy to use interface for business users to create custom management reports to be exported to excel or pdf format.

Back Office. The back office solution provides straight-through processing with respect to order management, compliance, regulations, securities master data, corporate actions, accounting, tax and reporting. It supports clearing and settlement, custodial recordkeeping, portfolio accounting, SWIFT confirmations and settlements, corporate actions feeds, general ledger and fee calculations, and reconciliation technology for wealth managers. Tax accounting is also available for Italian firms.

Wealth Apps. Sitting on top of OFS Advice and integrated into eXimius as well, the vendor provides front office advisor apps, as well as apps for the end investor. The apps are native for Android phones, iPhones, and for the iPad and for the Samsung Galaxy (running on customized Android OS) tablet.

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Advisor Studio App is a suite of three different advisor apps that focus on different aspects of the advisory process. i. Portfolio Studio: Advisors can access client portfolios on a real-time basis, conduct valuations and historical analysis of risk and return, access and create custom reports, read real-time news and research, and create portfolio alerts. ii. Holistic CRM studio: this app gives advisors complete access of a client’s financial and personal data. Advisors can set up meetings, create agendas, view client holdings, and also analyze client profiles. iii. Personal Advice Studio: Generally used in meetings or in preparation of meetings, advisors can run scenarios and analyses on goals and current investments, compare scenarios, create custom proposals, get the electronic signature, including biometric comparison checks.

Financial Planner App: Financial Planner is designed for Advisors (full version) and for Investors (light version). Investors can conduct a self-directed financial planning simulation inserting their incomes and expenses, simulate life events based on goals, and share the simulation with advisors. Advisors can use a wider set of events and goals, financial products to create deeper simulations and what-if analysis. Once created, Financial Plans can be resumed later in the office to be completed in the OFS Advice platform.

Client Active Desk App. There are two basic end investor apps that allow firms to provide different functionalities for different customer segmentations. i. Active Portfolio: Clients can access their portfolios, view detailed valuations, conduct performance analysis and set up alerts. This app is suitable for all customer segments. ii. Active Trader: A self-directed trading app in which investors can access market data, and execute trades. Typically such functionality is given to Mass Affluent clients who prefer more hybrid or self-directed forms of service.

Client Wealth Portal. Similar to Wealth Apps, Client Wealth Portal sits atop both OFS Advice and eXimius, and supports portal access to information and functionalities from both suites. The module provides functionalities for both advisors and end users. Below is a summary of functionalities supported for advisors and end users.

Advisor Portal Studio: Provides web access to company news, market views/opinions, educational tools, and product news from anywhere. Additionally, advisors can access and post documents to a vault, view client holdings, client alerts, events calendars, and access messaging systems. Advisors can customize and view product watch lists, change personal information, and view their commission statistics.

Client Portal Desk: A wealth management portal for investors. Private clients can access public information such as company information, locate advisor branches, view and access product catalogues, access online help desk, and read educational content and a glossary. Additionally, investors can access their portfolios and drill down into their holdings to view performance, access previous reports, view market data, business news, research, create alerts, and directly trade. Users can be permissioned for certain functionalities, allowing firms to segment their customer base, giving self-directed trading functionality to the Mass Affluent and portfolio information only to the HNW/UHNW customers.

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OBJECTWAY FUNCTIONALITIES AND TECHNOLOGY

The following sections provide an overview of the OFS Financial Suite. This section will focus on technologies, delivery and implementation options, and functionalities.

TECHNOLOGY, DELIVERY, AND IMPLEMENTATION Table 3 is a high-level representation of the technologies used. OFS deploys on both SQL or Oracle databases, and Windows operating systems.

Table 4 shows the delivery methods offered by Objectway. Obectway offers a web-based solution, as well as a desktop version. This desktop version is necessary given the “thickness” of the technology platform offering. The table also demonstrates the increasing importance of the mobility channel; Objectway has a robust set of mobile tools integrated with both OFS Advice and OFS eXimius Portfolio Manager.

Lastly, Table 5 demonstrates the types of implementations Objectway supports. An in-house implementation is synonymous with a client-side installation, whereas ASP and SaaS deployment models share a common goal of eliminating IT overhead from business. ASP is a deployment method where software is transplanted from the client side to a dedicated hosting environment custom-created by the vendors. SaaS, on the other hand, takes the concept of ASP deployment further; a single, integrated code base is hosted centrally and accessed on-demand by users. SaaS is multi-tenant, where all customers share the same environment.

Table 3: Basic Technology

VENDOR PRODUCT NAME

PROGRAMMING LANGUAGE SERVER OS DATABASE

Objectway Financial Software

OFS Financial Suite

Java, C# Linux, Unix, Windows

Oracle, SQL Server


Table 4: Integrations and Technology Delivery

VENDOR SAMPLE FRONT/BACK OFFICE INTEGRATIONS

TECHNOLOGY DELIVERY

DESKTOP WEB-BASED

MOBILE


Most back-office system integrations are in-house custom developments. Common back office vendor integration include as Accenture Alnova, FIS Profile, IBM XF (Italy), Oracle Flexcube, Thomson Reuters Beta Global, Allshare Bankview, SunGard.

Source: Celent, vendor questionnaires = support, = partial support, = in development, - = no support

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Table 5 : Implementation Environment and Implementation Partners

VENDOR INSTALLATION

ON SITE ASP SAAS IMPLEMENTATION PARTNERS


None. Collaboration with Bain & Co., Tata Consulting, Accenture, KPMG around business requirement analysis.


PARTNERSHIPS Table 6 provides a sample of major partnerships established. European markets reform public entitlement programs, financial planning and pension planning will become increasingly important.

Table 6: Selected Partnerships

VENDOR SELECTED PARTNERS


Financial and pension planning: Epheso;

Digital signature: SOFTPRO GMBH; XYZMO

Technology: Oracle; Microsoft

Client reporting: Equipos;

Back office: Thomson Reuters (for eXimius)


ASSET CLASSES, PRODUCT SUPPORT In the European market, support of discretionary and multi-strategy discretionary portfolios is vital to supporting the private banking market. Table 7 and Table 8 demonstrate that Objectway supports a wide range of asset classes, including warrants, domestic equities and fixed income, ETFs, mutual funds, and cash. As compared to North American counterparts, European investors are more likely to desire international equities and FX products, and so vendors more commonly support these products. In the European market, support of discretionary and multi-strategy discretionary portfolios is vital to supporting the private banking market.

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Table 7: Asset Class Support

VENDOR EQ

UIT

IES

GL

OB

AL

EQ

UIT

IES

FIX

ED

IN

CO

ME

INT

ER

NA

TIO

NA

L

FIX

ED

IN

CO

ME

INS

UR

AN

CE

HE

DG

E F

UN

DS

RE

AL

ES

TA

TE

PR

IVA

TE

EQ

UIT

Y

MU

TU

AL

FU

ND

S

ET

FS

DE

RIV

AT

IVE

S

FX

CA

SH

WA

RR

AN

TS



Table 8: Product Support

VENDOR DIS

CR

ET

ION

AR

Y

PO

RT

FO

LIO

S

MU

LT

I-S

TR

AT

EG

Y

DIS

CR

ET

ION

AR

Y

TH

IRD

PA

RT

Y

MA

NA

GE

D A

CC

OU

NT

MU

TU

AL F

UN

D W

RA

P

CO

MM

ING

LE

D

PO

OL

S

VA

RIA

BLE

AN

NU

ITIE

S

OT

HE

R


- - - -


CRM AND ACCOUNT AGGREGATION FUNCTIONALITY Table 9 shows customer management features. Increasingly, vendors are building out their native CRM modules (as opposed to merely integrating with CRM vendors) so as to differentiate from their competitors. For example, Objectway has been adding more campaign management tools.

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Table 9: Customer Relationship Management

VENDOR BU

ILT

IN

MO

DU

LE

INT

EG

RA

TIO

N W

ITH

TH

IRD

PA

RT

Y

CO

NT

AC

T M

GM

T

NE

W B

US

INE

SS

PR

OS

PE

CT

ING

IND

IVID

UA

L V

IEW

OF

AC

CO

UN

TS

HO

US

EH

OL

D V

IEW

OF

AC

CO

UN

TS

RE

LA

TIO

NS

HIP

HIE

RA

RC

HY

CA

LE

ND

AR

MA

NA

GE

ME

NT

AL

ER

TS

CA

MP

AIG

N M

AN

AG

EM

EN

T

DO

CU

ME

NT

MG

MT

CL

IEN

T R

EP

OR

TIN

G

CL

IEN

T S

EG

ME

NT

AT

ION

SE

AR

CH

BY

LA

ST

NA

ME

…B

Y C

LIE

NT

ID

…B

Y C

UR

RE

NT

LY

MO

DIF

IED



A holistic view of clients’ internal and external holdings is vital for advisors to understand client goals, provide the highest quality advice, and recommend appropriate products. Additionally, being able to view assets held at other institutions will allow wealth managers to compare their performance versus other institutions and make the case that clients should divert more assets to their own advisors. Thus, automated account aggregation is an important tool for wealth managers and vendors.

Table 10: Account Information and Aggregation

VENDOR

AUTOMATED INTERNAL ACCOUNT

AGGREGATION

AUTOMATED EXTERNAL ACCOUNT

AGGREGATION

DIRECT FEEDS TO SYSTEM

VIA WEB FEEDS



FINANCIAL PLANNING SUPPORT Objectway financial planning support is shown in Table 11, Table 12, and Table 13. Traditionally, European vendors have focused on integrating proposal generation tools with portfolio management, and have developed their core strength around portfolio management, supporting private banking and discretionary management.

Over the past 12 months, however, the ability to support both goal-based and cash flow-based planning is becoming increasingly important for wealth managers. Goal-based planning has become popular for a variety of reasons. From the advisor standpoint, goal-based planning gives advisors insight into client motivations and desires, and as such is perceived to be more “client-facing.” There is still a need for cash flow-based planning, particularly given the increasing importance of retirement income and distribution

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planning. For retirement income distribution, clients may need to consider the time dimension more closely to plan their expenses and distribution.

Table 11: Financial Planning Support

VENDOR BUILT-IN MODULE

INTREGRATION TO FINANCIAL

PLANNING VENDOR(S)

GOAL-BASED PLANNING

CASHFLOW-BASED PLANNING

GO

AL

PR

IOR

ITIZ

AT

ION

GR

OU

PIN

G O

F

GO

AL

S

RE

TIR

EM

EN

T

INC

OM

E

DIS

TR

IBU

TIO

N

LIQ

UID

ITY

SH

OR

TF

AL

AN

AL

YS

YS



Going forward, breadth of functionality (the ability to support multiple types of financial planning) and depth of functionality (sophistication and comprehensiveness of each type of planning) will be a differentiator for vendors. Ultimately, vendors who offer deep financial planning functionality will be able to sell their financial planning modules on a stand-alone basis. Objectway financial planning modules and functionality are outlined in Table 12 and Table 13.

Table 12: Financial Planning Functionality

VENDOR RE

TIR

EM

EN

T P

LA

NN

ING

ED

UC

AT

ION

PL

AN

NIN

G

TA

X P

LA

NN

ING

INS

UR

AN

CE

PL

AN

NIN

G

ES

TA

TE

PL

AN

NIN

G

EM

ER

GE

NC

Y F

UN

DS

MA

JO

R P

UR

CH

AS

ES

DE

BT

MA

NA

GE

ME

NT

DIS

AB

ILIT

Y

SU

RV

IVO

R N

EE

DS

ME

DIC

AL E

XP

EN

SE

S

GIF

TIN

G

ST

OC

K O

PT

ION

PL

AN

NIN

G


- - - - - - -


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Table 13: Retirement Income and Distribution

VENDOR

MULTI-PERIOD

RETIREMENT

REVERSE MORTGAGES CONSIDERED

BUDGETING TOOLS

EXPENSE CATEGORIZATION

PARTIAL RETIREMENT CONSIDERED


-


PLAN GENERATION

Table 14 demonstrates that Objectway supports various aspects of recommendation and proposal generation. Proposal generation is typically composed of various components, including: proposal templates with a set of administrative tools, guided proposal page flow, configurable profiling and risk scoring, what-if simulations, IPS reports, and workflow tools. Scenario modeling has become an increasingly important component to proposal generation. Objectway has both an advisor-facing and end client friendly component.

The use of models for asset allocation, combined with advisor flexibility in selecting asset allocations, is an important feature of the Objectway platform.

Table 14: Plan Generation

VENDOR PR

OF

ILIN

G A

ND

RIS

K

QU

ES

TIO

NN

AIR

E:

VE

ND

OR

PR

OF

ILIN

G A

ND

RIS

K

QU

ES

TIO

NN

AIR

E:

IMP

OR

TE

D F

RO

M F

IRM

S

PR

OP

OS

AL

CO

NT

AIN

ING

PO

RT

FO

LIO

SU

GG

ES

TIO

N

DA

TA

IM

PO

RT

OF

PO

RT

FO

LIO

HO

LD

ING

S

INV

ES

TM

EN

T M

AN

AG

ER

DA

TA

BA

SE

WH

AT

-IF

SC

EN

AR

IOS

WO

RS

T A

ND

BE

ST

CA

SE

SC

EN

AR

IOS

PO

RT

FO

LIO

RE

CO

MM

EN

DA

TIO

NS

:

AS

SE

T L

EV

EL

PO

RT

FO

LIO

RE

CO

MM

EN

DA

TIO

NS

:

SE

CU

RIT

Y L

EV

EL

PR

OP

OS

AL

TE

MP

LA

TE

S



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Table 15: Asset Allocation

VENDOR AS

SE

T A

LL

OC

AT

ION

MO

DE

SL

S

CU

ST

OM

E A

SS

ET

AL

LO

CA

TIO

N

AU

TO

AS

SE

T

CL

AS

SIF

ICA

TIO

N

FL

EX

IBL

E

CL

AS

SIF

ICA

TIO

N S

CH

EM

E

AD

VIS

OR

MO

DIF

ICA

TIO

N

OF

AS

SE

T A

LL

OC

AT

ION

US

ER

IN

TE

RF

AC

E F

OR

MO

DE

L

AD

MIN

INIS

TR

AT

ION

OTHER


Workflow recommendation management.


PORTFOLIO MANAGEMENT European vendors often seek to differentiate themselves by the depth of their portfolio construction, monitoring, and analytics tools. The depth of these tools ultimately determines how strongly the vendor can support discretionary investment management and high value private banking clients. The acquisition of eXimius gives Objectway the ability to provide deep support for discretionary services for HNW and UHNW customer segments. This is demonstrated by the depth and breadth of functional coverage for portfolio construction and risk analytics, demonstrated in Table 16 and Table 17.

Table 16: Portfolio Construction

VENDOR AC

CO

UN

T R

ES

TR

ICT

ION

CA

PA

BIL

ITIE

S

PO

RT

FO

LIO

MO

DE

LIN

G

MU

LT

I-L

EV

EL A

NA

LY

SIS

&

RE

PO

RT

ING

PR

E-D

EF

INE

D G

RO

UP

ING

ON

HO

LD

ING

S

US

ER

DE

FIN

ED

GR

OU

PIN

G O

N

HO

LD

ING

S

AB

ILIT

Y T

O D

RIL

L D

OW

N O

N

HO

LD

ING

S

PO

RT

FO

LIO

OP

TIM

IZA

TO

N

AU

TO

MA

TE

D R

EB

ALA

NC

ING

CA

PA

BIL

ITIE

S



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Table 17: Analytics

VENDOR PE

RF

OR

MA

NC

E

CA

LC

UL

AT

ION

S

RE

AL

-TIM

E V

AL

UA

TIO

NS

PO

RT

FO

LIO

P&

L

CA

LC

UL

AT

ION

S

P&

L O

N H

OL

DIN

GS

AS

SE

T A

LL

OC

AT

ION

AN

AL

YS

IS

CA

SH

PO

SIT

ION

AN

AL

YS

IS

PO

RT

FO

LIO

WE

IGH

TIN

GS

(B

Y

ST

OC

K,

AS

SE

T C

LA

SS

,

SE

CT

OR

, E

TC

.)

FIL

TE

RIN

G D

AT

AB

AS

E

AB

ILIT

Y T

O Q

UE

RY

DA

TA

EF

FIC

IEN

T F

RO

NT

IER

VA

LU

E A

T R

ISK

MO

NT

E C

AR

LO

SIM

UL

AT

ION

ST

RE

SS

TE

ST

ING

RIS

K V

S.

RE

TU

RN

PO

RT

FO

LIO

SIM

UL

AT

ION

HIS

TO

RIC

AL

AU

DIT



TRADING, COMPLIANCE, AND ADMINISTRATION Table 18 demonstrates that trading and compliance functionalities are well met by Objectway. The vendor has an integrated trading system and supports order entry, or automated order generation. MiFID II suitability requirements will continue to drive improvements in compliance technology.

Table 18: Trading and Compliance

VENDOR INT

EG

RA

TE

D T

RA

DIN

G

SY

ST

EM

OR

DE

R E

NT

RY

AU

TO

MA

TE

D T

RA

DE

OR

DE

R G

EN

ER

AT

ION

CO

MP

LIA

NC

E E

NG

INE

PR

E-T

RA

DE

CO

MP

LIA

NC

E

PO

ST

-TR

AD

E

CO

MP

LIA

NC

E

MIF

ID S

UIT

AB

ILIT

Y



As Table 19 demonstrates, Objectway has been developing workflow template capabilities. Given the importance of supporting multiple channels and both advisory and discretionary models of service, fee management support is crucial.

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Table 19: Administration

VENDOR

US

ER

DE

FIN

AB

LE

DA

SH

BO

AR

D

US

ER

EN

TIT

LE

ME

NT

S

GR

AP

HIC

DA

SH

BO

AR

D

AB

ILIT

Y T

O P

ER

SO

NA

LIZ

E

VIE

W

ME

SS

AG

ING

FU

NC

TIO

NA

LIT

Y

CR

EA

TE

TA

SK

S F

OR

OT

HE

RS

MA

NA

GE

ME

NT

RE

PO

RT

S

FE

E M

AN

AG

EM

EN

T

WO

RK

FL

OW

TE

MP

LA

TE

S B

Y

TY

PE

OF

US

ER

WO

RK

FL

OW

CO

NT

RO

LS

INT

ER

NA

L R

EP

OR

TS

FO

R

AD

VIS

OR

S

AU

DIT

TR

AIL

ON

AL

L A

CT

IVIT

Y



Given the diversity of languages and demand for multiple currencies in the European marketplace, vendor support of these functionalities is a necessity for vendors.

Table 20: Other Functionality

VENDOR MULTI-

CURRENCY MULTI-

LANGUAGE MARKET DATA ONLINE HELP FOR

ADVISORS



BACK OFFICE Over the past year, there has been a significant focus on front office tools so as to increase advisor retention, improve advisor-client interaction, and increase fee generation. The back office, however, is also vitally important in improving transparency, and reducing technology costs by enabling straight-through processing. Additionally, data integration from the back office and ease of processing are vital to increasing fee generation per advisor. Lastly, compliance and regulatory rules have put increasing burdens on back office operations. As such, back office automation is a vital pillar to reducing current technology spend and improving advisor workflow.

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Table 21: Back Office

VENDOR

CL

EA

RIN

G/

SE

TT

LE

ME

NT

CU

ST

OD

IAL

RE

CO

RD

KE

EP

ING

PO

RT

FO

LIO

AC

CO

UN

TIN

G

CO

RP

OR

AT

E A

CT

ION

S

GE

NE

RA

L L

ED

GE

R

RE

CO

NC

ILIA

TIO

N

TA

X A

CC

OU

NT

ING



SELF-DIRECTED FUNCTIONALITY AND MOBILITY Adoption of self-directed technology is increasing across European markets, with particular importance among large retail/commercial banking firms with private banking or wealth management divisions. This has enabled firms to offer hybrid levels of service alongside more full service advisory models. Table 22 provides a summary of Objectway’s self-directed functionality.

Table 22: Self-Directed Functionality

VENDOR SELF-DIRECTED FUNCTIONALITY FOR END INVESTORS


Modules include on-line Investor Portfolio, self-directed Trading, Financial Planning (also on iPad/Android). See profile for more details.


Heightened expectations from the client base demand that both end users and advisors be able to access information and portfolios from anywhere. Furthermore, wealth managers increasingly expect their advisors to meet prospects and travel. Mobile applications give advisors the ability to monitor their client base while traveling. Thus, mobile applications give advisors freedom from the home office. At the same time, however, it remains imperative that advisors be able to sync their mobile apps to the home office. New information or updated information collected via mobile apps are not stored natively on the app but are synched to home office data repositories. As such, the mobile app itself serves merely as a presentation layer accessing the underlying data that is stored elsewhere.

Table 23 provides a summary of vendor support of mobile apps from both an advisor and end user perspective. In many cases, the vendors are “ahead” of their client, often arguing the use cases for mobile tools to wealth managers. Celent expects that adoption of mobile technology will increase among wealth managers in the 4

th quarter of 2013 and

into 2014.

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Table 23: Mobility

VENDOR APP DESCRIPTION


Live end user app;

Live advisor app

End user app: portfolio views, alerts, news, simple financial planning tools, trading.

Advisor app: Portfolio Management for individual clients and book of business, Alert, News, Financial Planner.

See profile for more details.


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CELENT’S ABCD VENDOR VIEW AND THE XCELENT AWARDS

Celent’s ABCD Vendor View is a proprietary representation of a vendor marketplace designed to show at a glance the relative positions of each vendor in four categories: Advanced technology, Breadth of functionality, Customer base, and Depth of client services.

The Celent ABCD Vendor View shows relative positions of each solution evaluated and does not reflect an abstract evaluation. Each vendor solution is judged relative to the others in the group. In this report, the factors used to evaluate each vendor are listed in Table 24.

Table 24: Celent ABCD Vendor Analysis

CATEGORY FACTORS INCLUDED

Advanced Technology Deployment options

Channel support (i.e., mobility, branch, call center, etc.)

Integration to multiple systems

Customization/configuration

Cloud services

Integrated workflow

Breadth of Functionality Ease of use and integrated workflow

Number of modules supported

Depth of support within each component

Customer Base Number of clients

Total number of users

Average number of users per firm

Geographic distribution of customers across Europe

Depth of Services Breadth and depth of partnerships

Security and educational support

Customer reviews/client support resources

Breadth of geographic/branch support locations

Source: Celent

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XCELENT AWARDS Within this framework, the top performers in each of the ABCD dimensions received a corresponding XCelent Award:

XCelent Technology for the leading Advanced Technology score.

XCelent Functionality for the leading Breadth of Functionality score.

XCelent Customer Base for the leading Customer Base score.

XCelent Service for the Depth of Service score.

XCELENT TECHNOLOGY AND XCELENT FUNCTIONALITY Figure 3 positions each vendor along two dimensions: the vertical axis displaying the relative rankings for Advanced technology and the horizontal axis showing relative Breadth of functionality rankings. The XCelent Functionality winner is Objectway

Figure 3: ABCD Vendor View: Advanced Technology and Breadth of Functionality

Source: Celent

XCELENT CUSTOMER BASE AND XCELENT SERVICE Figure 4 positions each vendor along two dimensions: the vertical axis displaying the relative level of Depth of customer service and the horizontal axis displaying the relative Customer base.

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Figure 4: ABCD Vendor View: Customer Base and Depth of Service

Source: Celent

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LOOKING FORWARD

Amid increasing regulatory burdens, volatile markets, and low margins, wealth managers also have to contend with an increasingly demanding client base, new service channels, and increasing competition. Such challenges are driving wealth managers to find ways to reduce costs by reducing vendor relationships while simultaneously increasing their investments in technology. These technology enhancements are focused around increasing efficiency across the organization by automating the advisory process, and improving integration of channels and data, which ultimately enables the advisor to enhance product proposals and service for end clients. As such, Celent has seen renewed interest in wealth management platforms that provide a fully integrated end-to-end solution, one that manages evolving service models, new channels, and various segmentations.

Moving forward, Celent expects to see the following market and technology trends among the front-to-back office vendor space:

Continued focus on financial planning. As governments continue to address high debt burdens by raising taxes and reducing entitlement benefits, financial planning will become increasingly important. For UHNW customers, their demand for tax planning and gifting services will increase; for Mass Affluent customers, retirement, education disability, and major purchases planning will gain traction.

Acquisition or expanded partnering of point solutions. As front-to-back office platform vendors seek to differentiate their front office solutions, and as advisory services gain traction among wealth managers, vendors will likely seek to acquire or partner with new best-of-breed solutions so as to support both advisory and discretionary services. Integrating new solutions will be vital to ensuring advisor adoption.

Larger firms will consolidate vendor relationships and adopt more functionality from the platform players. Currently, many of the large Tier I firms take advantage of these front-to-back office platform vendors’ modularity to adopt only a few components. For example, some firms may use only the financial planning/advisory services functionalities with one vendor and use in-house technology or other third party systems for discretionary businesses. In this case, these large firms are not taking advantage of the economies of scale and integration that platform vendors offer. The mid-tier players are far more likely to adopt the full platform as more of a “turnkey” for wealth management support. However, as the larger firms seek to consolidate vendor relationships, reduce operating costs, and improve integration across channels and business lines, they will adopt more functionality offered by these platform providers. To make this transition easy, many vendors have adopted an “on/off” approach to implementation of the platform, whereby the initial code base and necessary functionalities are installed during implementation, so that administrators can simply “turn on” new modules when they want to add functionality.

Given the sheer number of systems within the large universal banks and Tier I wealth managers, open architecture and the ease in which these front-to-back office vendors integrate with other systems will remain differentiators in the near and middle terms.

Continued evolution in the definition of platform. The concept of the wealth management platform will continue to evolve toward a fully integrated end-to-end solution that includes technology, people, and processes. This model unifies technology and operations into one platform supported by a single provider. In essence, one vendor

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becomes the partner of choice for integrating and supporting enterprise wide wealth management operations and infrastructure. This platform will provide advisory and home office functionality, combined with business process support, data services, and channel management. This platform supports all stages of the client relationship including front, middle, and back office services.

Ultimately, such an offering allows wealth managers to reduce vendor relationships and attain a higher level of accountability from their vendor relationships. Few wealth managers will opt for a full “rip and replace” strategy in which the wealth manager begins adopting the full technology and outsourcing platform all at once, given the possible risks associated with service disruption and unforeseen challenges inherent in such a large-scale implementation. As such, wealth managers are likely to take a phased approach to implementation and applications are added as needed to the platform. In addition, vendors will very likely segregate their technology and services offerings such that firms can implement the full technology platform and use other service providers, or vice versa.

Market entrances. Vendors with a strong presence in Western Europe continue to view

economic growth in this region with considerable consternation. As such, many vendors will expand into Eastern European markets, where growth rates remain comparatively strong. Conversely, Eastern European vendors have been able to take advantage of strong growth in the region, and have now obtained new scale and considerable revenues. This will allow them to leverage their new maturity and enter Western European markets and take clients from incumbents.

Wealth management firms have a choice when it comes to a solution, from adopting an in-house, ASP, or SaaS deployment, to delivering it to just a few advisors or enterprise wide, and picking the level of customization they need. In addition, firms can choose whether they need deeper portfolio management functionality to improve discretionary businesses, or focus on advisory tools like financial planning. The decision to pick one provider over the other should be in line with the objectives of the firm. Overall, Celent emphasizes that firms consider breadth of functionality, but also the importance of data and workflow integration, seamless processes, and solution flexibility.

Copyright Notice

Prepared by

Celent, a division of Oliver Wyman, Inc.

Copyright © 2013 Celent, a division of Oliver Wyman, Inc. All rights reserved. This report may not be reproduced, copied or redistributed, in whole or in part, in any form or by any means, without the written permission of Celent, a division of Oliver Wyman (“Celent”) and Celent accepts no liability whatsoever for the actions of third parties in this respect. Celent is the sole copyright owner of this report, and any use of this report by any third party is strictly prohibited without a license expressly granted by Celent. This report is not intended for general circulation, nor is it to be used, reproduced, copied, quoted or distributed by third parties for any purpose other than those that may be set forth herein without the prior written permission of Celent. Neither all nor any part of the contents of this report, or any opinions expressed herein, shall be disseminated to the public through advertising media, public relations, news media, sales media, mail, direct transmittal, or any other public means of communications, without the prior written consent of Celent. Any violation of Celent’s rights in this report will be enforced to the fullest extent of the law, including the pursuit of monetary damages and injunctive relief in the event of any breach of the foregoing restrictions.

This report is not a substitute for tailored professional advice on how a specific financial institution should execute its strategy. This report is not investment advice and should not be relied on for such advice or as a substitute for consultation with professional accountants, tax, legal or financial advisers. Celent has made every effort to use reliable, up-to-date and comprehensive information and analysis, but all information is provided without warranty of any kind, express or implied. Information furnished by others, upon which all or portions of this report are based, is believed to be reliable but has not been verified, and no warranty is given as to the accuracy of such information. Public information and industry and statistical data, are from sources we deem to be reliable; however, we make no representation as to the accuracy or completeness of such information and have accepted the information without further verification.

Celent disclaims any responsibility to update the information or conclusions in this report. Celent accepts no liability for any loss arising from any action taken or refrained from as a result of information contained in this report or any reports or sources of information referred to herein, or for any consequential, special or similar damages even if advised of the possibility of such damages.

There are no third party beneficiaries with respect to this report, and we accept no liability to any third party. The opinions expressed herein are valid only for the purpose stated herein and as of the date of this report.

No responsibility is taken for changes in market conditions or laws or regulations and no obligation is assumed to revise this report to reflect changes, events or conditions, which occur subsequent to the date hereof.

For more information please contact [email protected] or:

Alexander Camargo [email protected]

Isabella Fonseca [email protected]

NORTH AMERICA EUROPE ASIA

USA

200 Clarendon Street, 12th Floor Boston, Massachusetts 02116

Tel.: +1.617.262.3120 Fax: +1.617.262.3121

France

28, avenue Victor Hugo 75783 Paris Cedex 16

Tel.: +33.1.73.04.46.19 Fax: +33.1.45.02.30.01

Japan

The Imperial Hotel Tower, 13th Floor 1-1-1 Uchisaiwai-cho Chiyoda-ku, Tokyo 100-0011

Tel: +81.3.3500.3023 Fax: +81.3.3500.3059

USA

1166 Avenue of the Americas New York, NY 10036

Tel.: +1.212.541.8100 Fax: +1.212.541.8957

Germany

Marstallstrasse 11 80539 Munich

Tel: +49.89.242.68.581 Fax: +49 89.939.495.21

China

Beijing Kerry Centre South Tower, 15th Floor 1 Guanghua Road Chaoyang, Beijing 100022

Tel: +86.10.8520.0350 Fax: +86.10.8520.0349

USA

Four Embarcadero Center, Suite 1100 San Francisco, California 94111

Tel.: +1.415.743.7900 Fax: +1.415.743.7950

United Kingdom

55 Baker Street London W1U 8EW

Tel.: +44.20.7333.8333 Fax: +44.20.7333.8334

India

Level 14, Concorde Block UB City, Vittal Mallya Road Banglalore, India 560001

Tel: +91.80.40300538 Fax: +91.80.40300400

european wealth management technology vendors€¦ · temenos (triple ’a plus with back office...

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