Introduction to FigaroWealth 30

th

September 2009 John Blackman

Agenda

• • • • • • • • • Background Why are we here? History of Figaro Introduction to Figaro Market Trends The role of the relationship manager Figaro Desktop FigaroWealth Becoming a Figaro User

Background

• John Blackman – Computing Science degree – Joined John Hemming in 1985 – One of the original authors – MD since 1999 – Target of sustained organic growth with continued investment into Figaro

Background

• Steve D’Souza – Ex Odyssey – Employed specifically to give JHC product advice on wealth management systems – Launch Figaro Wealth

Background

• JHC – History of steady growth – Expansion through new clients and the success of our existing clients – Investment in people is part of our business plan – Future growth from relationships with outsourcers, particularly with TDWCSE, as well as direct clients

Turnover (£M)

12,0 11,0 10,0 9,0 8,0 7,0 6,0 2005 2006 2007 2008 2009 2010 (FYF)

Employees

160 140 120 100 80 2005 2006 2007 2008 2009 2010 (FYF)

History of Figaro

Figaro is driven forward by a core group of experts who have worked together for many years

Why are we here?

• • • • Figaro has been the market leading fully integrated, comprehensive solution for stockbrokers for many years Following recent developments Figaro now has an integrated wealth management module that can compete in its own right with recognised wealth packages – Modelling, re-balancing, switching, performance monitoring and risk analysis This is based around a proven back-office system We believe that, particularly in the present market conditions, a fully functional real-time integrated solution offers considerable benefits both to our users and particularly their clients

Introduction to Figaro

•

Fully integrated

– – – Back office/Front office/Web True STP – one database, not just messaging Real-time trading and settlement processing •

Wrap platform

– Multi –product management – Full asset coverage •

International processing

– – – – Global settlement Global custody True multi-currency STP •

Scalable

– <100 – 50,000+ transactions per day – 15 – 1,500+ users FIGARO has been developed for over two decades by adding client led functionality and embracing new technologies and is the leading platform in the UK broking market

• • • • • •

Introduction to Figaro

FIGARO utilises

a single database

to support a huge array of services for financial institutions

Client database

–

CRM

KYC, Relationship management, wrap platform support – Contact History, Event workflow, Document management, Outlook Integration (email)

Wealth Management

– – – – Portfolios & accounts Tax wrappers (ISA) Modelling, Re-balancing, Risk CGT, GIP compliant performance

Figaro Web

– Clients and Advisors – Enquiry & trading

Order Management System

– – Linked to UK RSPs and Order Books (SETS) Collective dealing and International dealing systems

Workflow & MI

• • • • •

Integrated STP Settlement links

• CREST/Euroclear, Cofunds, EMX, Fidessa, BBH, BoNY)

Nominee

• • • Pooled or designated Auto reconciliation US tax support

Corporate Actions

• Fully configurable with election support • Automatic Euroclear integration

Client Payments

• Ad hoc, standing orders, income distribution • BACS, CHAPS & cheques •

Fees

Auto bank reconciliation • • Invoice system with pre-list Custody, management, ad hoc

Figaro – Why is it unique?

• • • • • Real time integrated system – Means that there are no interfaces to write or maintain, no reconciliations between systems.

Single licence agreement for entire solution simplifies the transition process and also the long term relationship, since the support for regulatory changes is included.

All original authors still support the system allowing major enhancements (such as Euroclear Single Platform) to be integrated without detriment to the system Figaro provides full unit trust support Integrated Order management and bulk dealing – Direct access to RSPs via Best Execution servers – SETS integration (ProQuote & Thomson) – Fidessa (Executed trades)

Market Trends

• Change in profile of Figaro users 2005 2009 Stockbroker Fund Manager Institutional Broker Other Stockbroker / Wealth Manager Fund Manager Institutional Broker Other

Market Trends

• Figaro clients changing their service models – Broker was friend, stock-picker and commission based Stockbroker Mrs Miggins

Market Trends

• Figaro clients changing their service models – Now firms offer a more integrated solution to wealth management Sales Team Relationship Manager Investment Committee Miggins Family

Market Trends

• • • • • • Stock market perfomance – Equities  funds and financial products Pressure from FSA – Conformance to mandate and risk analysis Relationship with IFAs especially now due to RDR – No trail!

Trend towards annual management charge or wrap charge Convergence of service requirements – Family Miggins gets same service as UNW clients However following funds (with baskets of stock in them) in the good times keeps the client happy and is easy – who knows whether that will work in the next few years?

• • • • •

The Role of the Relationship Manager

Making Mrs Miggins feel special – Just like the good old days!

Checking that her assets are in line with her wishes – Performance & risk Clear & concise reporting, annual reviews Proposing new products Transparent fee structure • • Figaro clients are offering a private banking style service  Figaro desktop

A day in the life of the wealth manager

CRM • Check all client communications • Send letters & email Actions & workflow • Chase up outstanding tasks Risk • Check that portfolio is still within accepted risk boundaries • Monitor asset allocation to model • Make changes to model strategy Portfolio Management • Respond to changes from the Investment Committee • Modelling & Switching

Figaro Desktop

• • “Home page” for relationship manager CRM • Actions and workflow • • • Relationships Marketing tool Integrated with MS Word and email

Figaro Desktop

• Integrated with Figaro front office for – Detailed client enquiries – Real time valuations and cash statements – Modelling comparisons – Order entry and management – CGT – Cash & client payments

Figaro Wealth- Toolset

• • • • • • • Asset allocation framework to contain the strategy required Model creation within the framework and application to a number of clients Monitor for exceptions Bring clients back in line allowing for special considerations such as CGT or stock preferences The firm’s advice might change and the relationship manager needs to be able to quickly and simply switch between stocks Provide performance analysis – GIPs compliant reporting e.g. time-weighted returns – Risk weighted Execute the resulting trades in real time – Bulk trading – Pre-trade checks

Figaro Wealth - Framework

• • • • Multiple frameworks allowed Decided by wealth manager or investment committee Asymmetric allocation Can be used for a number of models

Figaro Wealth - Modelling

• • • Create model within framework Allocate actual assets within the hierarchy and show when assets satisfy the framework

Figaro Wealth – Linking clients to the model

Multiple work sets , may be shared between relationship managers Select by product, relationship manager Multiple product support Quantity or £ value

Figaro Wealth – Re-balancing

Detail for each client Client or product level Ticks and crosses to show degree of imbalance Model view shows actual and target % at each level of the hierarchy Validated candidate orders displayed using Figaro pre-trade checks Released as bulks to Figaro Order Management system

Figaro Wealth – Switching

Multiple worksets Choose by relationship manager Select stock to switch out of Multiple stocks to switch into Take previous holdings into consideration Generate bulks depending on assets class Minimum order size Generates candidate orders in real-time with pre-trade checking ready for release in to Figaro OMS

Making it easier to become a Figaro user!

• • • Consultancy – JHC have many years of experience in planning and managing clients onto the Figaro platform Training – JHC have a dedicated training department who show users how to perform their roles on the new system Migration – Standard processes and routines used many times each year – Client data, transaction history and open positions

And now the slide you have all been waiting for..

     Figaro is a proven solution that is being developed continually to ensure that our clients can provide a market leading service Figaro Wealth will provide innovative wealth management tools integrated to a market leading platform The integrated, comprehensive solution reduces the cost and complexity of the IT required and it may be outsourced Simple commercial and contractual arrangements lead to long lasting partnerships JHC supports the entire migration process and has a proven track record of delivering client service

Introduction to FigaroWealth 30

th

September 2009 John Blackman