4th edition 11th May 2016
Introduction by Andrew Arwas
Welcome to the fourth edition of #sharethewealth, the fortnightly newsletter of Capco UK's Wealth & Asset Management domain. You probably knew that, I suppose. One of my other hats focuses on comms across Capco UK, and we recently took the opportunity at last week's London Town Hall to gather some feedback on what you would like to see more or less of in how we communicate with each other. Highlights included "be less boring" ... so I'm running a risk here! Also though, there seems to be demand for more industry insight, more pipeline news, more visibility of key individuals and leaders. All of these match well with our mission here at #sharethewealth and we will continue to bring you the content you want to see.
Please let us know how we are doing. Four editions in and we are getting more practised at producing this 'mighty organ of news'. But we want your feedback and suggestions. Is there a topic you want to see us cover with a feature? Is there a project or proposal you'd like to hear more about? How can we improve? Get in touch with our editors - Tom and Arjun - and let them know. Or else we risk becoming, well, "boring"!
Latest News from across the Sector
Nutmeg chief steps down amid shake-up - Here
Credit Suisse will run their Asset Management business under both Wealth Management and Banking as part of a new strategy - Here
Over half of Wealth Managers in the UK would say Brexit would negatively impact the UK Asset Management Industry - Here
Wealth managers reveal their biggest fund selection concerns… but play down Brexit threat - here
AXA UK confirms plans to offload Wealth arm after selling Elevate to Standard Life - Here
Carney sets scene for Brexit rate cut - here
Introducing: FIS I&W, formerly Sungard market analysis project by Charles Sincock
Market analysis for Fidelity Information Services Institutional & Wholesale (FIS I&W)
FIS I&W, formerly Sungard, have asked Capco to conduct market analysis focusing on trends and consumer feedback. The client has been through a lot of change over the last decade, having moved from a public company, into (seven funds participating in a co-invest/club deal) PE ownership and finally it was acquired in late Nov 2015 by FIS. As part of this ownership change the management team has been refining and developing their strategy. This piece of work will be utilised to inform their market strategy for the next 3 – 5 years.
The analysis will be comprised of primary and secondary research regarding trends across Financial Services. The primary research will take the form of meetings with senior individuals in the risk, technology, operations and finance functions. The research will cover primary business drivers which affect growth, including: Revenue, Cost, Risk, Regulation and Technology. Most of the major areas within FS will be covered, specifically: Corporate and Investment Banking, Hedge Funds, Asset Managers, Insurance and Brokerages.
The final product will be available to FIS I&W in its full glory but an anonymised version will be available to Capco clients as a thought piece. The output will ideally be something that can be used to facilitate conversations on future opportunities for work as well. At the least Capco respondents will be provided with a version, as way of thanks for their time in informing the primary data.
If you would like to help introduce any further clients to this piece of work we can always do with more data. Please contact in the first instance Charles.Sincock@capco.com for more information.
Introducing Nicole Beck
What is the most interesting Wealth project you have been on and why?
This was my first project with Capco. The client (JP Morgan - Geneva) intended to close down the trust business in Geneva due to regulatory changes and to migrate this part of their business to Nassau. The project became increasingly complex as the majority of the clients within these trust structures were not compliant with the intended migration to Nassau. So we had to work closely together with various lawyers specializing across jurisdictions to create appropriate legal solutions for the trust clients, to carry on executing trust deeds, to organize the setup of a trusteeship entity in a compliant jurisdiction and most importantly to keep the trust officer motivated to convince the trust clients to migrate.
What is your experience in the Wealth/Asset Management sector?
I worked for 7 years within Swiss private banking always in client facing roles.
What do you think will be the trends in Wealth Management in 2016 and beyond?
In my understanding money and people become more volatile, cross-border prone and wealth management clients will increasingly look for bankable solutions within various jurisdictions to face regulatory insecurities. The challenge for the wealth management institutions is going to be to remain compliant while the clientele becomes increasingly complex and to remain profitable by automating their compliance.
Mergers and Acquisitions
B. Riley Financial (RILY) to Acquire United Online (UNTD) in $170M Deal
Colony Capital in talks to merge with NorthStar Asset Management
The M&A market is waiting out Obama: Morgan Stanley’s Kindler
1.WAM Knowledge Management - Nathalie Mesey Here
Contribution: Help define and implement our strategy for using Knugget across WAM domain.
2.WAM Communication - Arjun Dogra Here
Contribution: Daily web research on latest news and developments from across the sector. Research goes towards the #sharethewealth newsletter.
3.WAM Training - Laura Wassink Here
Contribution: WAM training materials preparation.
4.Writing Blogs - Andrew Arwas Here
Contribution: Prepare 500 Words (intro, 3 key points, summary) – Part of Capco UK external publications (published on Capco.com and Finextra)
5.Campaign: “Women in Wealth-Management” - Julia McColl, Zaki Ahmed & Ivon Evlogieva Here. 3 aspects - Research, writing whitepapers and events for the campaign.
6.Campaign: “Digital & the Future of On-boarding and the RM Desktop” - Dan Giannotti Here
3 aspects - Research, writing whitepapers and events for the campaign.
7. Regulatory Research round-up - Richard Plumb - Here
e.g.“Financial Advice Market Review”
Contribution: reading, searching and gathering info on key regulatory developments.
8. Build UK Asset Management Consulting - Dan Giannotti Here
Contribution: Helping with propositions and AM industry collatera
Spotlight: FCA Paper on the UK Corporate Bond Market
The FCA completed a unique investigation into the liquidity of the UK bond market by analysing granular level trade data from Jan 2008 to Dec 2014, available via their role as the national competent authority. The core findings are that:
· Since the financial crisis and especially since 2011, primary dealer inventory has decreased, but liquidity has remained steady. This may be explained by increased technology allowing more efficient portfolio management, or by a reduction in bank proprietary trading
· Liquidity risk broadly follows the liquidity levels and is less erratic or ‘flighty’ than perceived, for instance after mild shocks, like the 2012 and 2013 ‘taper tantrums’ or the 2014 ‘flash crash’, there were not periods of higher volatility
· The liquidity component of yield spreads is steady or declining, emphasising a high level of liquidity in the market
· Extreme stress situations may still cause a decline in liquidity, as seen in the financial crisis aftermath
These findings contradict the idea that corporate bond liquidity has decreased, due to regulatory interferences or otherwise. It projects a picture of bond market which is highly liquid and resilient to short term scares. However there is still a risk of liquidity decline under periods of extreme stress.
I wanted to start the pipeline section by acknowledging the successful completion of the current phase of our week at RBC. For 8 months we have had a series of small teams largely focused on helping RBC define their thoughts and vision for CRM and laying the groundwork for a programme to deploy a new CRM platform. The budget for that programme won't kick in until Q4 and so we finished with a project focused on a series of quick wins achievable in advance of that platform. It is my full intention that we'll be back in Q4 to drive forward our recommendations. Until then I want to thank the roll-call of all those who made this a successful 8 months: Al, JD, Dom, Amelia, Sean, Shaun, Laura, Dan and Julia. Not only did this team do great work for their clients, but that work is helping us win new business elsewhere and has also triggered several partnership discussions. Most importantly though, they have been an amazing group of people to work with, as I'm sure their new teams are already learning. Thank you Team RBC!
PIPELINE & PROPOSALS
This week I'll step back and give an overview of our pipeline. As at today we are tracking around 40 opportunities in our pipeline. No, that doesn't mean we have sold, or will sell, 40 projects, as we track an opportunity from the earliest sniff of an idea. In total there's over £7mil of potential fees in those projects but when we weight that by probability it comes to more like £1.5-£2mil. The key is to move 'prospects' to 'proposals' and then hopefully to 'projects'. We currently have proposals in and pending at L&G and Equniti. In the next couple of weeks we hope to add Allianz, Sanlam and Sumo Capital to that. Our win at DB Sparta is also starting to generate visibility on a range of new opportunities there, which Dan and Annie are following up.
So, the pipeline looks healthy. Now the task is 'convert and close'