Personal Financial Management Consulting and the Impact of the Internet

1. Personal Financial Management Consulting and the Impact of the Internet By Marcus Brown MIS 1:00 pm 10.28.04

2. Contents • Personal Financial Consulting p.3 • Methods p.5 • Traditional Firms p. 8 • Financial Reporting p. 11 • The Internet p. 13 • Future of Banking : Bots p. 14 • A Look Ahead p. 19 • Security Issues p. 21 • Bibliography p. 22

3. Personal Financial Consulting • Financial Consulting provides economic, financial, and business strategy consulting to law firms, corporations, individuals and government agencies • Assist law firms in all aspects of economic and financial models • Advise corporate and government clients on business issues that require expert interpretation of economic and financial data: financial planning, pricing issues, company and asset valuations, cost-effectiveness analyses, market analyses, and evaluation of mergers and acquisitions

4. Help organizations create strategies for growth by analyzing market dynamics and organizational capabilities • Enhance innovation in current products and services • Identify new market opportunities

5. Methods • A structured method to simplify the process • First - identify your priorities, learn more about your current situation and goals and pinpoint any issues you haven't yet addressed, such as: • Investment planning- Business planning- Retirement planning- Asset preservation- Tax planning- Education planning- Estate planning- Debt management- Disability & income protection- Special needs

6. Second - summarize where you are now in relation to your goals and, together, can prioritize the areas that are most important to take care of first • Third - build your plan in manageable sections by addressing one issue at a time, so the process isn't overwhelming or confusing

7. Finally - review of your plan every six months, to help you stay on track and learn of any significant life changes that we should take into account

8. Traditional model • Traditional brokerage firms are transaction oriented • Provide an in-depth financial analysis before making any investment recommendations • Strategic difference is in providing exceptional and personal client service

9. Asset allocation recommendations give consideration to the time horizon for the portfolio, distribution amounts, client's age, family status, income and estate taxes • Active management involves both mutual fund selection and monitoring, and appropriate investment allocation given the economic and market outlook

10. Actively managing asset allocation for economic and market conditions • Accomplished using research from several sources and constantly updating economic indicators like the treasury yield curve, market valuation models, credit spreads and Federal Reserve policy

11. Financial Reporting/ Technology • Financial reports and the value they contribute to the duties of financial managers • Firms must understand that the role of the financial manager, particularly in business, is changing in response to technological advances that have significantly reduced the amount of time it takes to produce financial reports

12. Financial reports can be used by linking your business to our computer system with a variety of specialized software • Using these programs, you can instantly update your records, access financial management reports, and print checks, invoices and other documents

13. The Internet • Technology is changing how consumers learn about, buy and use financial products and services • The Internet gives access to information "24/7“ • As the Internet matures and access becomes faster and easier, more information about products and price will be available to customers, and more information about customers will be available to suppliers

14. The Future of Banking • The changes brought about by technology—price transparency, intensifying competition and increasing consumer expectations—will lead to nothing less than the eventual demise of traditional retail banking • Retail banking as we know it today—credit, insurance, investment and funds storage and transfer—will be fundamentally changed

15. The Future of Banking: Your Own Financial Bot • A "bot" is a software robot. Some day each of us will have one to serve our financial needs • This personal financial bot will be an Internet-based service accessible through many types of devices (e.g., phone, personal computer, television, personal digital assistant and automatic teller machine/kiosk)

16. It will know us and will serve as our agent in financial dealings, often without troubling us with the details. • It will shop for us, manage our funds for optimal day-to-day performance, adjust our insurance coverage to changing needs, and maintain an inventory of our belongings and service agreements

17. Personal financial bots will arise because we want the full benefit of the many options and opportunities available to us, but also want someone, or something, to manage that complexity by sorting our options, choosing the best ones and acting on our behalf. • Our personal financial bot will be an extension of our own thinking

18. What Are Bots? • Bots are the culmination of five online services that are evolving and converging today • Electronic wallets - contain consumer's private information. • Shopping bots -search the Internet for the best deals on products and services; some now offer product research. • Auction sites offer a wide variety of goods and services (escrow accounts and insurance) • Personal portal sites are adding features to support online commerce and are collecting ever more personal information. • Financial service sites and online trading firms are expanding beyond their original functions

19. A Look Ahead • Consumers will have more power and greater access to services. • Financial products can be made more sophisticated • Financial products will be sold as part of a primary product configuration

20. Staying Ahead • Traditional retail banks that want a role in the coming personal financial bot era will need to make changes; they will need to: • Think of customers, not products • Partner with primary product providers • Get better at assessing risk • Master the technology

21. Information Sharing and Disclosure • Your personal information is never shared outside the service provider without your permission • Data is stored in controlled servers with limited access • Safeguards the security of the data you send us with physical, electronic, and managerial procedures

22. Bibliography • Axis Enterprise Solutions http://www.axis-strategy.com/print/personal_finance.htm • Centrical Solutions http://www.home-by-the-sea.com/centrical/ • City Practicionershttp://www.citypractitioners.co.uk/page.php?navrID=24&ct=a&artID=7 • Colofin http://www.colofin.com/introduction.htm • Copperstate Consultinghttp://www.copperstateconsulting.net/1.htm • Digital Insight http://www.digitalinsight.com/ • IBF Mgt http://www.ibfmgmt.com/Privacy%20Policy.htm • IGCL http://www.igclbahamas.com/business.html • Intro to Personal Financial Mgt http://www.mapnp.org/library/prsn_wll/finance.htm • http://www.wbresearch.com/netfinance04/full.html#2 • Nielsen http://www.nielsen-netratings.com/mktg.jsp?section=is_fi • Accenture http://www.accenture.com/xd/xd.asp?it=enWeb&xd=ideas\outlook\pov\pov_bots.xml • Sterling Consulting http://www.sterling-consulting.com/Practice.htm#BriefMC • AEAUS http://www.aeaus.com/index1.php • Jones and Roth http://www.jrcpa.com/wealth_mgmt/wlth_mgmt_process.html