From using your smartphone to FaceTime loved ones, checking your bank account online, through to ordering an Uber: the influence of technology on our lives is undeniable.

It is therefore no surprise that advisers and their clients are looking to work with discretionary fund managers (DFMs) who offer top-notch online services. As technology continues to influence most areas of our day-to-day lives, demand for digital engagement from customers of financial services businesses continues to rise. At DISCUS, we suspect that those DFM firms who place technology at the heart of their capex and growth plans will thrive over the long-term.

For example, three quarters of respondents in Nucleus’s 2018 Census said their clients have at least a moderate expectation of digital engagement with their investments.

Meanwhile, Defaqto’s DFM Service Review 2018 found that only 63% of a sample of advisers were satisfied with the online facilities provided by their DFM. This represents the second lowest satisfaction rating after ‘quality of literature’ and suggests that DFMs have room for improvement when it comes to the digital services they provide.

Of course, DFMs aren’t alone: advice firms can also benefit from investing in their online propositions. Earlier this year, Heather Hopkins, managing director of consultancy Next Wealth, noted that research had indicated that only half of advisers offer their clients access to account information.

RC Brown is a discretionary manager that is extremely passionate about digital engagement.  They have anticipated the growing demand and are in the early stages of piloting a new secure portal for both clients and advisers.  We caught-up with Robert Clark, Sales and Marketing Director, to understand their new system, the development process they went through, and what he believes the future may hold.

The technology development process

We began the process two years ago, having looked down the line at the requirements of MiFID II. Our desire was to digitise as much as possible, not only to meet our regulatory obligations, but to streamline the flow of information from RC Brown to our adviser partners and clients.

You might be surprised to learn that it took 18 months to find a technology partner who met RC Brown’s requirements. It’s not that they were asking too much, they simply needed a firm with the right mind-set, and capability, who could deliver the project.

Unfortunately, DFMs have been left behind while providers have focused their development agenda on adviser and client-facing platforms. And with the DFM segment largely ignored, technology providers have very little or no understanding of DFM businesses. As a result, RC Brown found that many saw it as far too complicated and didn’t want to get involved.

After numerous conversations with well-known providers, we found that their either just wanted to sell us a stock product that they had already developed for a different market, or that extracting the required data from our trading platform was seen as ‘too difficult’.  Finally we came across the guys at Moneyinfo.  They started with a blank sheet of paper, to understand what our requirements were and what we were trying to achieve.  They didn’t attempt to force-fit a solution and brought a raft of new ideas for us to consider.


System requirements

RC Brown’s requirements were relatively straightforward. but having previously been pioneers in this area they needed something that was a step-up from what their clients were already experiencing. They wanted a system that would render across all devices (desktop, laptop, tablet and mobile) and could deliver:

» Daily portfolio valuations and transaction history

» Historic valuations and charts

» Access and storage for quarterly reporting

» Secure messaging for client instructions

 

These items were crucial and non-negotiable. Robert stressed that they weren’t trying to be too clever; they simply realised that the world was ‘going digital’ and they needed to future proof their business.

I use my smartphone for most things and I’m sure our clients do too, or will do very soon. We certainly won’t force it upon clients, instead we will make it available to those who want it. Approximately 50% of clients currently use our online system, and we don’t expect a huge up-tick in that number.

 

Technology focus

When we launched our private client business in 2010 we wanted to streamline as much as possible and create efficiencies. We can transact across hundreds of portfolios, at the same time, at the click of a button. Our first client and adviser portal was built on this premise – to allow for the efficient transfer of information – and while it was cutting edge at launch, the new world caught-up.

You will know from previous articles that RC Brown’s core ethos is full transparency. Giving clients access to this level of detail enables them to see what we do, every day. What their portfolio is worth now, what it was worth previously and the trades we’ve undertaken. It makes the flow of information easy. Clients can also send instructions securely and instantly, from the palm of their hand, where previously we required a signed letter.

 

Looking to the future

Our plan is to get this right first.  We have been piloting the new system with a handful of clients for the past 3 weeks, and will launch to all clients by the end of November.  The adviser portal is taking longer to perfect, so that will follow in the New Year.

We’re not trying to be too clever. What we’ve realised by going through this process and migrating to a new system, is that the extraction of data represents the biggest challenge. Because, as an industry, we don’t use a single data script, pulling it out is difficult. However, once you can export the data in a readable format, it is then easier to plug into other systems. This means we can start looking at back office integration for our adviser partners as the next phase in our development. Watch this space!

As always we appreciate your views. Please add your comments in the space below.

 


This article was created for the DISCUS website to highlight the new portal under development by RC Brown Investment Management. If you would like to find out more about RC Brown, please visit the RC Brown page on this site.