We spoke to Steven Levin in February 2018:
Steven Levin is CEO of UK Platforms for Old Mutual Wealth, prior to that he was Global Head of Distribution. Steven has extensive experience in developing and distributing financial service products as well as in asset management and investments, and he was previously Product & Proposition Director for Old Mutual. He has also been an equity analyst and fund manager. We got his thoughts on the industry today.
SL: If we look back five years, the Platform and Wealth Management markets looked remarkably different. Change has been driven in large part by regulatory developments to increase transparency, such as the Retail Distribution Review and more recently the Markets in Financial Instruments Directive (MiFID II), but also by technological advances and government policy shifts, most notably the ‘Pension Freedoms’, which fundamentally changed how people manage their wealth in retirement.
These macro trends of transparency, technology and the shift in responsibility from the state to individual for later life savings will also be the main drivers of change over the next five years.
There is a challenge and an opportunity for the Wealth Management and Platform sector to improve the customer journey to make our services as accessible and clear as possible. Technology will play a key role, particularly with upcoming generations used to high levels of digitisation. But firms will need to explore how to get the balance right between digitisation and human interaction. Face to face contact often remains important in wealth management and financial advice due to the fact that people still want to talk to another person when investing meaningful sums of money or making big financial decisions.
Meanwhile, we are moving towards a world where people need to take far greater personal responsibility for their later life savings as the state ’s role lessens. There is a challenge for the industry to create different experiences to engage people with their long-term savings and ensure wealth management is easy to navigate.
SL: Over the years the asset management and platform markets have changed and their roles within the wealth management chain have evolved. So it makes sense the regulator to take a closer look at what that means and how that affects customers.
With these studies, the regulator will get a better picture of the competition landscape. This will give them the knowledge to better outline their expectations and requirements of these markets to ensure they are working in customers’ best interests.
SL: As most UK wealth managers and platforms are not actively writing business across EU borders the direct impact of Brexit on business models is relatively light.
The most significant impact of Brexit is likely to be on our customers’ confidence investing. This period of both economic and political uncertainty and the forecast to slow down economic growth is likely to have a detrimental effect on levels of customer investment.
SL: In the broadest sense, digitalisation refers to every aspect of our lives being captured and stored in digital form, with the hope that this will make the running of our lives easier. For businesses like ours, the aim is to create seamless experiences between different services: advice; asset management; and platform services so we are easy to do business with.
We also need to be mindful that when it comes to managing wealth, people are rightly cautious about how their information is stored, particularly as issues with data security are still predominant. So digitalisation requires a balance between accessibility and security.
Wealth Management is a data-rich industry and I believe there is a lot more that companies can do with data to inform product design and enhance customer outcomes. The new fields of Artificial Intelligence and Machine Learning also offer significant opportunities to reduce costs, improve efficiency and service for the benefit of customers.
SL: The trend within Banking and Insurance which saw significant disruption to things like payments and lending has perhaps been slower to impact Wealth Management, although there is huge potential. Robo advice is already appealing to some people today, although evidence suggests it is most likely to appeal to younger clients with limited assets.
Much of the Wealth Management sector is focused on ‘at-retirement’ solutions which can often require complex planning, and therefore is when face-to-face advice is often favoured.
However, we are committed to extending the footprint of financial advice. Therefore helping advisers to reach new customers through digital channels is an obvious place for us to explore. We consider developments in FinTech a positive opportunity to drive better outcomes for our customers through digitisation of internal process, client experience and adviser integration.
SL: Our strategy is built on a belief that technology needs to be an enabler to the business to allow us to focus on delivering a differentiated adviser and customer experience. Our current advice portal is a key strength of our business. Our new platform will maintain and improve the usability of our online portals with a significant expansion of our proposition.
Secondly, technology transformation programmes are very complex and it is important to build strong partnerships and deep working relationships to underpin both the project phase and ongoing evolution of the platform. This is a key focus of our programme.
Finally, it is important to deliver a smooth migration by proactively engaging with end users, in this case, financial advisers, through training and transition support.