The key lessons learnt

Chris Willaton 
Director and Head of Investments
Akambo Private Wealth
Stephen Romic Principal
Head of Research and Investment Committee member
DFS Portfolio Solutions
Perspectives asks two industry professionals the following question:
Q: What are the three key lessons you have learnt from establishing and running a managed accounts business?

  1. Points of differentiation
We established our managed accounts offering to provide a better client experience through building efficiencies and scale into our business. And whilst it has done exactly that, competition, technology and consumer expectations continue to evolve quite rapidly.

This means we need to keep refining our offering to maintain points of differentiation, and strive to provide a superior client experience – otherwise, someone else will.

  1. Don’t lose sight of what the client wants
Offering a managed accounts solution has brought efficiencies to our business and a better client experience (investment choices, efficient execution of trades, and a more qualitative focus in the client interaction).

But most clients also want to feel special – whether through a bespoke investment approach and/or a genuine personal engagement with their financial adviser. A product alone does not do this.

  1. Performance matters
Whilst a ‘better client experience’ can enhance the client relationship, most clients still need to see measurable results – relative and absolute.

A managed accounts platform has given us greater flexibility and more tools to deliver this.
We have been able to leverage our successful performance (particularly with our international portfolio) to differentiate our offering.
In 2008, DFS made the decision to adopt a managed account solution across the entire business. This was a pivotal point in the firm’s history, launching us into a brave new world. When asked what key lessons we learnt through the process, the following comes to mind.

  1. Clients are much more receptive to change than you think
We learnt that clients expect us to be more innovative and deliver progressive solutions to improve their overall experience. In order to improve, change is inevitable and the challenge quickly turns to how to best manage change. Engaged clients are more likely to support any change, and clear and succinct communication is key to managing client expectations.  

  1. Preparation pays rewards.Recognising that the change in business model was a major decision point for both the firm and our clients, we deliberately invested time in the pre-advice phase. We embarked on:  
  2. i)   creating a structured narrative to ensure consistency of our message;  
  3. ii)  rolling out information and updates on a staggered basis; and  
iii) informal communication to directly engage with clients.  
By the time the client was presented with the formal SOA, setting out the transition to a managed account, they were already familiar with the proposed recommendation.  

  1. Delivering positive experience is crucial
Once clients experienced the managed account regime, they openly confessed their appreciation of not having to consider and formally execute ROAs and SOAs whenever portfolio changes were being proposed; real time portfolio summaries were welcomed as a much less obtrusive way to communicate portfolio changes, compared to the conventional IDPS regime.

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