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Regulation will change significantly

Impact of regulation on the shape of IFA distribution and strategic opportunities pursued by Sanlam. Regulation will change significantly. Overview of RDR Implications. How RDR affects Product Design. RDR – the direct impacts: Remove commission bias Transparency and disclosure

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Regulation will change significantly

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  1. Impact of regulation on the shape of IFA distribution and strategic opportunities pursued by Sanlam

  2. Regulation will change significantly

  3. Overview of RDR Implications

  4. How RDR affects Product Design • RDR – the direct impacts: • Remove commission bias • Transparency and disclosure • Increase professionalism of advice CONSUMER AWARENESS & TRUST • AND Indirect impacts: • Capital and Value flow • Use and role of Platforms • New routes to market • From Products to Propositions RE-ENGINEER THE MARKET

  5. Advice models and standards Product design must be tailored to the channel & the advice model

  6. Changing Business Models

  7. Product to Proposition • Proposition • Focus on life cycle needs • Distributor and Customer needs • Whole value chain, how is the product generating its return and how is the distributor generating theirs? • ‘Marry’ the product with the advice • Stay focused on needs • Product approach • Focus on acquisition • Distributor versus Customer needs • Only part of the value chain, focussed on product returns • Narrow definition • Leads on features and benefits • Products supplemented with commission and wider support to distributors

  8. Focus on acquisition

  9. What do IFAs want? • To deliver on promises to clients • Cost efficiency • Sustainability • Building value • Demonstrate assets under influence • High proportion of reoccurring income • Profitability • De-risking • Guarantees • Expertise • Training • Marketing • Business support • IT support

  10. What will be the drivers moving forward? • Guarantees • At a sustainable cost • That are safe • Reduce risk not increase it • Post retirement market • With profits? Will the Pru win? • Cost • Building the scale

  11. What will be the drivers moving forward? • NMG Survey “The lack of ‘cost leader’ in the UK Wealth market demonstrates the difficulty of achieving cost efficiency with complex legacy books” • Barriers to entry • Transparency • De-risking • Building process with IFAs • Managing funds to risk categories • Sharing risk

  12. What will be the drivers moving forward? • Value • Recognising the shift in the value chain • Proctor and Gamble to Tesco • Effect of regulation • Distribution • Different channels • Value of independence • Specialisation • Tax planning • Differentiation

  13. How Sanlam are positioned to respond • De-risking • Building process with advisers • Managing funds to risk categories

  14. Recognising the shift in the value chain • Joint venture discretionary fund management businesses • Investment partnerships • Product design

  15. Specialisation • Technical • Tax • Business consultancy

  16. Cost • Lack of legacy • New entrants • Niche • Self select • Section 32

  17. Brand

  18. Ambitions • Partner with up to 50 FA businesses in the post RDR world • 10 joint ventures building to £500m per relationship • 40 investment partnerships • Niche products – app on iphone

  19. The winners will be… • …“Those that align closest to distribution”

  20. Energising Together

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