There are several types of on boarding that relate to both business and investors structure and size, their specific purpose for investing and their local regulatory constraints.
The Main Participants
I will be focusing on four main participants in this post financial advisers (FA) and investors (I), either or both of these may be constituted by companies, funds or individuals and para planners (PP), local office administrators (external or internal) (AD), company back office administrators (AD). Other participants are traders, local regulation, international treaties, company regulation, regulatory reporting, trustees, product managers and the security services.
The role of the financial adviser is shaped by the organisation they work for both by its nature and its size. As a general rule, the smaller the firm, the more the adviser is likely to be involved in the process of client management. They will be managing their calendar, running segmentation reports, and getting to know the systems their firm uses. An adviser in a larger firm may spend more time on face-to-face client interaction and will delegate other tasks to administrators and Para-planners. They will be an avid consumer of research, but might have summaries prepared by para-planners. The adviser’s use of online tools and services will vary, but this is an attitudinal variable and is less correlated to the size of firm. They may view online tools as essential to helping perform well on behalf of their clients, in which case they will be a demanding and sometimes critical user. Alternatively they may be wary of disintermediation, seeing online servicing as a threat and something that could devalue the relationships they have carefully cultivated with their clients.
Para-planners are usually younger than advisers, and probably use online tools more frequently during the average working day. They will often carry out tasks for example, creating illustrations or portfolio models on the instructions of a financial adviser or as a way to show capability for the next step in their career. Although the Para-planner often carries out similar tasks to the administrator, their context of use differs. They may be an aspiring adviser herself, and their tasks are usually part of a larger, open-ended activity, such as research, where they help shape the approach. This means that although Para-planners often make use of process-heavy features, they are less process-driven than administrators. For Para-planners, attitudes to technology may be less behaviour-defining than for advisers: not at a sufficiently advanced career stage to make decisions on behalf of the firm, and will make use of the technologies available. Finally, they are likely to be heavily involved in the planning and aftermath of client review meetings, even if they do not attend them. They will play an essential role in meeting preparation and in executing any follow-up actions agreed with the client. In this sense they are a key resource for the adviser, and will therefore value any tools that help them work more rapidly and more effectively.
Of all the participants the investor is most subject to variation. The main reason for this is that, while other participants are shaped to a certain extent by their job roles and the responsibilities, constraints and priorities these involve, investors are strongly defined by attitudinal factors which vary from individual to individual. One key factor that defines how an investor interacts with the product company is their degree of financial mediation, with discretionary investors on one end of the spectrum and self-directed investors on the other. The differences between these extremes are so significant that, these will need to be defined as distinct participants later. Other factors that will strongly shape investor behaviour include risk tolerance, investment horizon, degree of financial engagement & sophistication, the amount of time devoted to financial matters, and the way online information is located and used (this last factor is important even if an investor is entirely discretionary). It is also important to remember that the investor participants as well as the product company’s business goals relating to them are heavily affected by the stage of their relationship with the product company and with their adviser.
The roles carried out by administrators can vary significantly based on size of firm and the age or career ambitions of the administrator. Some administrators see the job as a transitional stage before attending university and receiving a financial qualification others might be called “career administrators” and might have been working in this role for many years. Some administrators especially career administrators may have become experts in the systems they use on a daily basis. In smaller and mid-sized firms, these administrators will probably be the company’s leading expert on these systems, and there are real-life examples of administrators who have created manuals for asset management systems which are used to train new staff. These experts can sometimes be most resistant to changes, even when the changes represent a tangible improvement, as they have invested so much time becoming familiar with the old system. Resistance to change is less pronounced among administrators who are younger, less experienced, or who do not intend to stay in the role in the longer term. Administrators are not key decision-makers in an organisation, but they are key users, if a system frustrates them and reduces their efficiency, their firm will suffer.
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