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Today’s investor wants (and can have!) both advice and control

ARTICLE BY

  • EasyEquities

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The views expressed in this article are not necessarily those of the FIA. The article below was supplied by 2018 FIA partner, EasyEquities.

The advice process is a delicate fiduciary responsibility. It requires very specific application to individual client needs performed with due care, skill, integrity and honesty in order to provide a high degree of certainty in achieving specific client goals. This is the departure point for all advisors when defining their unique value proposition. Advisors who best demonstrate these aspects are inevitably rewarded for their value.

In days gone by, clients were really impressed by tech tools that made their lives easier. Today they’ve been become so accustomed to tech that they expect it in all facets of their life. It’s become entry level. So why would it be any different when it comes to retirement assets? Right now, providing the degree of ease, access and transparency that tech can offer clients when it comes to their finances is seen as a sliver of added value. However, a tech-based offering will soon mean the difference between a thriving advisory practice and one that is a distant memory.

Sure, clients need and want advice. But they also want control and the ability to make some decisions themselves. Seeing these two needs as separate within the client experience, although acceptable in the past, now creates a lack of trust in the system and leads to all the wrong sorts of client behaviour. Only by combining these needs – advice and control – into a single, seamless, transparent and easy experience can you build trust and empower clients. This brings about a more robust advisor/client relationship and outcome, importantly allowing the advisor to focus on providing the best possible advice.

As RDR rolls on and advisors across the board start restructuring their practices, never has there been a time when lower fees and increased transparency are top of mind for investors – not to mention the heightened requirements for better returns in the current environment. All these factors lead to increased pressure on advisors to deliver on all these aspects, while continuing to operate a viable business. It is widely appreciated that fintech is having a significant impact on financial services and there is no doubt that in this new, pressurised regulatory environment, advisors who embrace fintech will benefit significantly over time. The acceptance of this change and how to implement it with the least disruption is the chasm that most advisors are hesitant to cross. There have, however, been some success stories. One example is EasyEquities, which makes investing easy, cheap and accessible to the everyday investor.

Emperor Asset Management, one of EasyEquities’ stable mates in the Purple Group, shares these values. The company’s data-driven, algorithmic approach to asset management is tech-based and highly scalable. Our goal is to be South Africa’s best asset manager, at a reasonable cost. The combination of tech-based values and cost efficiency makes Emperor an easy choice for financial advisors looking for an asset manager that will provide consistent results and good value for money across the value chain. It is well documented that there are positives and negatives to passive and active investment styles. We have taken the best aspects of both and combined them into a rule-based, data-driven methodology that does not rely on human judgment, and which can be objectively tested and affirmed using historical data. The Emperor model is universal and covers markets in South Africa, USA, UK, Europe, Asia and elsewhere.

Central to our investment philosophy are our factor building blocks, which are created in line with our data-driven parameters. Our solution-driven approach allows us to engage with advisors and create bespoke risk targeted portfolios that align with the advisors’ specific investment needs, using different combinations of these factor building blocks. Not only does this allow advisors to have access to a bespoke, cost effective and sophisticated asset management solution, but, in conjunction with the EasyEquities platform, aligns the client’s investments with an online platform experience that is sure to
add that “X factor” to the entire client experience.

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