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My colleague Paul and I were given the enviable task of representing Morningstar at this year’s IFP Conference, held at Celtic Manor Resort in Wales. It has been a wonderful event for networking and the speakers have truly been thought provoking in sticking with this year’s theme, “Driving the profession forward.”

On the first afternoon I attended a session about technology – first looking at wraps, then at various cash flow tools and finally a discussion on how to choose software for your business.

John Porteous from Macquarie highlighted that wraps should be invisible in a business. Hopefully any technology you’re using can be integrated into your process seamlessly but I think the notion of the invisible wrap is a great goal.

The presentation of cash flow modelling tools was very interesting and I was pleased to see so many in the audience who have taken these tools on to add to their service proposition. Identifying a business need then finding the correct technology solution to deliver it.

Some of these tools are more complex than others but a theme that stood out was the need to take the time to properly learn how to use them. Whether you’re doing live modelling with clients or just preparing presentations for meetings, proficiency will make the whole process so much more effective.

Ben Crockford from Anametric Limited then shared some really good ideas about the process to follow when selecting technology solutions for a business.

• Make a shopping list and keep it so your sure the technology meets your needs
• Research the market before contacting suppliers
• Control the demonstrations and be sure you’re not just being shown the shiny stuff – make sure the technology can deliver the things on your list.
• Be thorough in your due diligence – trial, test on your own – but be prepared to compromise. There are no perfect solutions.
• Budget your time and properly plan for implementation

With any addition of technology there is an implementation phase which can be just as important as the actual technology. If the provider of the technology offers help with implementation, take them up on it.

Overall, the session stressed the need for smart technology solutions to scale business processes and deliver higher quality service – themes that have come up in conversations I have had with our clients over the past 6 months.

More IFP Conference in my next post – the golf course is calling!

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Posted in: Events, IFA News and Commentary,

Morningstar is proud to share with you BrightTALK’s upcoming series of web seminars discussing ETFs ten years after their launch. The seminars will take place on Tuesday September 14th with on-demand videos available thereafter. If you use ETFs and want to learn more, or if you’re considering using them in portfolios, this will be a great chance to get expert insight and analysis. Click here to visit the ETF Summit homepage or see below for registration and details on each seminar.

Presentations Include:

“How to use ETFs as Building Blocks for a Core Portfolio”

Live: Tuesday 14^th September, 2pm BST, or afterwards on-demand

Register here: http://www.brighttalk.com/r/8Rf
**
** Ben Johnson, ETF Strategist at Morningstar will provide a broad overview of both the tactical and strategic potential for ETFs in investors’ portfolios. Ben will examine the advantages and disadvantages of using ETFs as building blocks for a core portfolio, discuss how they can be used to supplement existing core positions, and provide real examples of core portfolios constructed solely of ETFs.

“Panel Session: The Truth about ETF Investor Safeguards”

Live: Tuesday 14^th September, 4pm BST, or afterwards on-demand

Register here: http://www.brighttalk.com/r/nRf

At this interactive panel session you will be able to pose your live questions to expert panelists; Chris Sexton, Head of Investments, Saunderson House; Manooj Mistry, Head of db x-trackers UK, Deutsche Bank and Mark Weeks, Chief Executive at ETF Securities.  This webcast will be moderated by Bradley Kay, ETF Analyst, Morningstar.

“An Adviser Perspective: Incorporating ETFs in Practice”

Live: Tuesday 14^th September, 3pm BST, or afterwards on-demand

Register here: http://www.brighttalk.com/r/sRf

Join Philip Bailey, Head of Investments at Assetsfirst and Provisio Portfolio Solutions. In this webcast you will learn how a seasoned IFA has successfully incorporated ETFs into new business practices and how these can be leveraged to benefit both your business and clients.

“Choice & Diversity: The London Stock Exchange Guide to ETFs”

Live: Tuesday 14^th September, 12pm BST, or afterwards on-demand

Register here: http://www.brighttalk.com/r/MRf

Gillian Walmsley, Head of Fixed Income Products, London Stock Exchange will provide a guide for IFAs to utilise ETFs on the LSE. She will highlight the continuing development of these simple and flexible investment tools and identify the key drivers for the market’s continuing growth and expansion.  Gillian will also answer your questions on key trends in new product development and discuss what the future holds for this market.

Register for any or all of the webcasts here: http://www.brighttalk.com/r/qRf

If you are able to join live you will be able to submit real-time questions to presenters and take part in presenter-led polls. All the webcasts will be available afterwards to view on-demand, at your convenience.

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Posted in: Events, IFA News and Commentary,

Every IFA is short on time so if things can be done to free-up time in your day I bet you might be interested. You can’t cut time from client meetings and you can’t say no to every industry event but what about all the preparation that goes into your service proposition? A good process can make this preparation more efficient and more effective. So how do you implement one?

I’ll go out on a limb and say three quarters of IFAs in the UK could use some help with process. Some firms use a process provided by their network or compliance people. Some firms have put some thought into a process but fall short in implementing it. And some firms just do not follow a process – relying on a collection of tools to provide bespoke service to each and every client.

To implement a good process, or improve an existing one, I’ve found that getting everyone on the same page is a good start. If you have a paraplanner that takes care of much of the preparation, do they know how the information is presented to clients? Do other advisers in your business follow the same process or do they have their own way of doing things? And if someone goes on holiday, does the whole thing come screeching to a halt?

If you have a great process in place, please stop reading and give yourself a pat on the back. If you think you could be more efficient, more consistent or provide a better service, below are some tools within Adviser Workstation that can be used to improve your process or more effectively implement one:

Research

• Create investment lists to give you instant access to all the funds you work with regularly, all the funds in an asset class, all funds that can be used in an ISA, or all top rated funds.
• Build custom searches to automate your research process. Easily see up-to-date results for all funds in a sector, category, region or that match any of your own criteria.
• Create your own views so you can instantly access relevant data and statistics when reviewing your fund panels.

Client Reporting

• Import your client portfolios from your wrap platform(s) for instant access to portfolio analysis tools.
• Setup report templates for different client groups so client reporting is done automatically each month, each quarter, each year or whenever reports are needed.
• Post client reports to the web portal so your clients can view their portfolio analysis securely, online.

Attracting and Signing New Business

• Create hypothetical illustrations showing how a portfolio would have performed over time as well as the effects of fees, rebalancing or taking income as opposed to re-investing dividends.
• Build and maintain your model portfolios on the system for instant analysis anytime.
• Use the investment plan tool to asses a clients risk level, recommend an asset allocation and then recommend a model portfolio to match it.

Monitoring Clients and Securities

• Set alerts on lists of funds or for clients so you are notified when there is a manager change, a rating change or a large price movement, for example.
• Compare the asset allocation of a client’s portfolio with that of a model
• Build and maintain your own benchmarks for accurate portfolio benchmarking

For more helpful tips, feel free to contact me by email – jim dot murphy @ Morningstar dot com

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Posted in: IFA News and Commentary,

Morningstar.co.uk today announced the results of our first exchange-traded funds survey. We spent six months quizzing professional and individual investors about their attitude towards, understanding of and experience in ETFs, and will be asking the same questions at six-month intervals to build up a picture of how this relatively new asset class is being used and viewed by UK investors over time.

Over 1,000 investors responded to our first survey, 15% of which were professional and 85% individuals, and we were surprised to see few surprises in the results.

Exchange-traded funds are known for their low costs but trading too often can quickly turn this low cost into a high one—something we had feared some investors may have been unsuspectingly tempted into. Instead, it seems that current ETF investors are not using them for fast-trading, risky bets, but instead as longer-term allocations to overweight a specific sector, country, or inflation protection.

Overall, the number of individual investors and advisers across Europe who use ETFs is still extremely low, and of those who remain wary of this asset class our survey revealed more education is in high demand.

Of professional investors who are unsure whether they want to invest in ETFs, 67% cited a lack of information about exchange-traded funds as the primary reason for their caution. Among individual investors, it was an incredible 77%.

Having trawled through the data and analysed the results, Morningstar’s associate director of European ETF research, Bradley Kay, commented that there is a stark split between respondents who are in need of more information about ETFs and those already familiar and the product’s key features. “Even among active investors, we found ETFs are being used in quite a passive way, for example to overweight in a particular asset class and with infrequent trading thereafter.”

We’re certainly encouraged to see that investors are already putting ETFs to sensible use in their portfolios, but— as expected — there’s an ongoing need for further information and education…something Morningstar is only too happy to accommodate!

If you’d like to know more, you can download the synopsis of our first ETF survey results here, and participate in the second ETF survey here.

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Posted in: IFA News and Commentary, Morningstar, Research,

One of the inspirations for this blog came from the many conversations I have with advisers everyday and the challenges advisers face in operating a profitable business, finding enough time in the day, and staying within regulatory guidelines that seem to always be changing.

We have been able to help many clients overcome these challenges so this blog is a way of sharing those ideas and solutions with others.

One example of this was Peter A. Sudlow, Principal of Sapienter Wealth Management who came to us wanting to streamline his bi-annual review process. It normally took him the better part of a month to gather all the statements, do all the calculations and produce the client reports.

We managed to help Peter import his clients’ past transactions from the platform into the Adviser Workstation. Once imported, he had the full suite of analytical and performance reporting tools at his disposal. Some quick construction of performance report templates in the system and he’s able to produce better quality reports in less than half the time.

His next time bi-annual review period is likely to be even quicker as he works out the best way to implement this new process. So with a little investment in time our client has been able to add significant value for his clients in terms of the quality of reports provided and he has freed up more of his time to spend with those clients or perhaps potential clients.

If you are in need of a more efficient process or a way to justify fees to clients it may take an investment of time to learn something new. Many advisers I speak with just can’t spare the time. But the ones that have found an hour here or an hour there to learn something new or to implement a new process, they have quickly seen the return on their investment.

Over the next 5 weeks I will be sharing more examples like the one above. Hopefully you can benefit from them. Hopefully they spark some of your own ideas. If you have any to share, please do. If you’re looking for help, please let us know!

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Posted in: IFA News and Commentary, Morningstar,

Many people are wary of mixing business and social media. But in almost all the cases I’ve come across, it’s those who haven’t yet experimented with platforms such as Twitter, LinkedIn, Facebook and online blogs that are the sceptics.

The relationship between a financial adviser and their client is based on trust. Survey after survey has shown that, in spite of all the professional advice and analysis available to investors, it’s often word-of-mouth recommendations from family, friends and acquaintances that prompt individuals’ investment decisions. Social media is a sort of word-of-mouth form of marketing. The ability to read blog posts, follow Twitter comments, watch videos explaining investment products, count LinkedIn recommendations, track Facebook conversations (and numerous other ways of interacting via social media) can only assist the process of ensuring that clients’ needs and advisers’ services are suitably matched.

The ability to gain recommendations on LinkedIn is one clear metric that potential clients can use when researching advisers. Similarly, Twitter’s #FF (Follow Friday, whereby Tweeters recommend fellow Tweeters worth ‘following’) is another easy-to-digest indicator. But the key to social media is the ‘social’ part. It’s not a passive form of communication, it’s active and interactive, whereby advisers can display their expertise and reach out to potential clients in an ever-increasing number of ways.

Being a relatively new phenomenon, there are few statistics on how social media usage has impacted the adviser-client relationship but I would wager that those advisers who are writing blogs, creating videos, hosting webinars and engaging in online conversations to inform and update on industry developments are those most likely to grab the attention of potential clients. And in doing so, those advisers can better ensure that they secure clients whose goals are aligned with their areas of expertise. Social media provides the opportunity to share knowledge and broaden reach in a live, concise and personal manner. After all, behind every investment portfolio there’s a human being—interaction is what we’re all about.

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Posted in: IFA News and Commentary,

How rigorous is your client reporting? Do clients value the work you and your staff put into reports? Do they help justify your fees?

One ironic thing I have learned is there is no standard for client reporting amongst IFAs. Some firms produce beautiful output for clients. Some firms simply do not. Why the disparity?

Based on the conversations I’ve had, it depends on the resources available to the adviser, the process that’s in place and the clients who will end up reading (hopefully) the reports. A good combination of the first two may allow a business to service clients that otherwise would not be profitable.

I’ve heard a lot of talk of RDR pushing people towards the banks because normal folks won’t be able to afford an independent adviser. But if an adviser has an efficient process in place that provides automatic report generation and cheaper operating costs, suddenly a lot more people become potential clients.

So is the level of reporting you provide a chore, or an opportunity to demonstrate value to clients?

Client segmentation has been another popular issue. For some clients a simple, compliant report does the job. But for more discerning clients, the value is in the attention to detail. If clients are to pay fees, the quality of information their adviser provides surely plays into the value of those fees.

If your current reporting process is setting you apart from the competition, you are ahead of the curve. If you, or your back office staff, are toiling over spreadsheets and collating documents from 8 different places, it doesn’t have to be that difficult. Consider a process that anyone can follow and make it consistent so clients become familiar with your review process. Consider each client and provide an appropriate level of detail – which will lead to easier segmentation of your client base. And consider the educational value of the reports for your clients because an educated client (usually) makes better decisions.

Producing high quality reports and analysis for clients can be a huge opportunity to add value and distinguish your service. If you’re in need of improving this aspect of your business Morningstar can help. If you’re proud of your client service please feel free to share in the comments below.

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Posted in: IFA News and Commentary, Morningstar,

With summer in full swing I’m wondering if advisers are taking this time to get out and see more clients and prospects or are you re-evaluating any processes to see if you can improve the way you do things or add value to your service?

It would seem to me that this isn’t the busiest time of year, at least not for our clients, so how do you approach a slower period? If you’re in the office reading this it means you’re not in Spain, Italy or the South of France. Are you catching up or re-tooling?

I have had some clients in for training recently who are keen to start automating more processes in their offices and they’re looking to Adviser Workstation to help them. Importing client portfolios from wraps has been a very hot topic.

I have helped our clients import portfolios from Transact, Nucleus and Advent and we will be adding additional platform templates in September to make it easier for more advisers to import portfolios into Adviser Workstation. If you’re not using the import facility yet, why not? What can we do to help?

Evaluating a current investment process also seems to be something many of our clients are doing this summer. Is the current process compliant? Is it consistent? Does it produce results?

I know we have had these discussions this summer so we’re hoping there are some good ideas being considered and some self assessment taking place.

It is pretty easy to get caught up in the hum of business as usual during the year so a little reflexion and re-assessment can go a long way.

If you have time this summer to re-evaluate some aspects of your business, give us a call or send us an email – we would be happy to help. I guarantee there are things the system can do to help you add value, save time and mitigate risk.

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Posted in: IFA News and Commentary, Morningstar,

The Morningstar Adviser Team ventured to Wales on June 22^nd to present Morningstar’s software and research capabilities to IFAs in the Cardiff area. We have several clients in and around Cardiff so it was nice to see some familiar faces as well as meet others for the first time. The day gave us a great opportunity to discuss some very timely matters facing advisers, most notably looking at the whole market when considering investment products for clients.

Jackie Beard and Tom Treanor, both of the Morningstar investment trust research team, joined us for a discussion which aimed to explain some of the key components of  investment trusts and how they can be used in a client portfolio when the full market needs to be considered.

We found the reception from IFAs to be a little guarded – mainly based on past scandals involving investment trust dealing – but we also found our audience could benefit from an independent analysis of these types of investments.

We realise the industry is crying out for better information, better analysis and more insight so we’re very excited to be expanding our qualitative research capabilities to cover investment trusts and ETFs.

If you have a need for this kind of analysis or if you have any feedback for us, please let us know. The slides from the Jackie and Tom’s presentation are available by clicking here.

The Adviser Workstation portion of the day consisted of one-on-one training sessions and an overview of the system’s capabilities with a focus on importing client portfolios and investment planning.

It was great to see some of our oldest clients learning new features of the system and taking useful bits of information back to their offices.

We also saw an increased need for client reporting tools and a process to produce consistent output on a regular basis. I will be focussing on these types of things in future training classes so please feel free to provide any feedback or requests in the comments section below.

Our development team is hard at work this summer preparing for the next software release in early September.

We have some great new features planned that are sure to make your day-to-day operations run even smoother. Stay tuned for more about these additional features.

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Posted in: Events, IFA News and Commentary,

In January, Morningstar Adviser Workstation was awarded the Best IFA Online Tool by Professional Adviser magazine. We were thrilled to win this award, especially considering the other nominees which included Inteliflo, Adviser Office and Trustnet. This was a great start to 2010 and a real testament to our efforts in 2009 to improve the tool and increase awareness of Morningstar in the IFA community. We are really looking forward to building on this success in 2010 as we increase our efforts to integrate with various wraps and back office systems and continue to make Adviser Workstation an indispensible tool for IFAs.

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Posted in: IFA News and Commentary, Morningstar,