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Wealth Management in the New Age

Ronny Lavie, Managing Editor at The Fintech Times.

Now in its 50th year of business, SEI is a leading global provider of investment processing, investment management, and investment operations solutions that help corporations, financial institutions, financial advisors, and ultra-high-net-worth families create and manage wealth.

Kevin Russell, the SEI Wealth Platform Proposition Director in the UK, chatted to us about his journey within the industry, his innovative work with SEI and what the future holds for financial services.

What’s your journey in the industry been like so far?

I started my financial career at Standard Life. Over a period of about 25 years, I travelled through a number of different roles – initially technical, as I have a mathematical background, then on the distribution side. For the last 10 to 15 years I’ve sat between major projects in organisations and running global ecommerce business, setting up the infrastructure on which the whole digital business runs. I’ve also been involved in bringing wealth platforms to the UK market.

In 2010, I left Standard Life to set up my own consultancy practice – we helped organisations transition out of traditional markets, like life, pension and banking, to look at how wealth platforms can power their future propositions. I did that on both the client and supply side for six years, then came to SEI. I’ve known Brett Williams for a number of years, and he asked me to join SEI and work with the Exec team to help position the SEI Wealth Platform’s proposition for success in the UK market. When that work was finished, I was asked to stay on as Propositions Director, so I now head up that team.

How have things changed since you started out?

If I think about when I started out in the industry, we used to administer things with memos and such, and we had to evidence everything through signature and paper. Throughout my whole career, there’s been rapid acceleration of tech’s impact on administration and, more importantly, on the user experience in the context of engaging and facilitating the purchase of financial transactions, like insurance and investing. The important role technology plays now, and will continue to play going forward, is as an enabler for companies to offer something that is both engaging and valuable to consumers. That has been the biggest change.

Another thing linked to this is that most organisations are now worried about whether they have a diverse enough team across the board to go after the opportunities that technology offers the business, and to make sensible decisions about where and how to invest in order to bring these opportunities to fruition. That’s what we’re seeing in the market – a few firms are changing their teams and having these discussions about making the right investments, while some others are struggling to decide which direction to take and are being left behind.

SEI is a very technology focused firm. How do you keep on top of technological advancements and how do you decide which to invest in?

SEI has both technology and customers at its heart. We see our business as not just about technology, but about how we can use it to deliver outcomes for clients.

The first thing for me is to understand the clients – how they want tech to empower their businesses and what they want to invest in it. This is done through spending time with the clients and researching the market. I’m very fortunate that we have a global research team that allows us to coordinate our own primary research, along with gathering secondary research and aligning it to the context of other markets. This helps us to make decisions about how to best serve our clients.

Tell us about your co-sourcing model.

The core thing about the co-sourcing model is that it recognises the evolution of the market. With new technology emerging through innovations like blockchain, AI and Big Data, certain services and their associated margins are becoming commodities. Our aim is to link these tech advancements with more traditional financial services. The challenge for many is that, if you use products from multiple suppliers, where all these connections are not in place, you are in danger of delivering different outcomes across different sectors of clients and getting into trouble with regulators. So our job is not just about helping clients comply with regulations, but helping them build a compelling proposition that is regulatory sound and efficient, helps manage cost and engages well with the consumers.

Our approach to co-sourcing is built around a belief in providing the right partnership model for the client. Rather than a straight-forward outsourcing relationship, we work with our clients to identify the technology they use today and wish to keep using, as well as identify the tech that could be replaced with a more efficient and effective solution. This model and access to APIs means we can integrate these into our infrastructure, enabling clients to embrace change where it will have the most impact.

What’s your take on cryptocurrencies and blockchain?

Crypto is interesting. None of our clients are directly involved with it at the moment, but it’s certainly an emerging market – it’s absolutely in the cards.

In terms of security and facilitation of agreement across a supply or customer chain, blockchain can deliver outcomes that will have significant impact in our world.

I don’t see blockchain as something that will happen in the future – it’s already here now, and we are working with clients to see how we can use it to better the service we provide them.

Do you think the growth of the fintech sector is likely to foster better financial inclusion?

We’ve seen new technologies help our clients extend the range of advice they can give and identify the clients who can afford to consume it, because they are using tech to bring down the cost of serving those customers. This is the significant advantage for the market – it’s taking the friction out of the process and encouraging firms to package solutions that are cheaper, simpler, easier for the clients to understand, and directly consumable. With professional guidance or technology’s support, more individuals are becoming confident about making investment decisions.

There’s still a lot to do – the government needs to lend a hand. We’ve seen some progress in terms of tax simplification and the product regime. There are lots of hurdles firms like ours have to jump through because, in a regulated world, the cost of regulation is still a problem. I think the government and the market need to address that, but there is no doubt that tech is enabling more clients to enter the market.

What do you think financial services are going to look like in 10 years time?

What do you think financial services are going to look like in 10 years time?

We contemplate that a lot – we have innovation teams in the UK and US. In our world, which has historically been focused around investment and wealth management, I think the focus will move towards financial wellbeing in its broader sense. Today in the UK, we don’t facilitate platforms that support wealth and health together, so both insurance and health planning.

Solutions are evolving around allowing access to richer data, which gives a more holistic picture of the client, and tech like AI and Big Data provides ways to mine that data more effectively. We’re no longer thinking of products for a range of profiles, but targeting the needs of specific individuals, based on their social and financial data. If the government manages to simplify the tax regimes and provide appropriate incentives for individuals to save, then we’ll transform the savings market in the UK over the next 10 years.

What’s next for SEI?

We’re looking at how we can interact and integrate with the new technologies that are coming to market in regtech. We have Codify, our regtech incubator, and we’re working externally with fintech firms to deliver utility components to add to our core products. Our work over the years has allowed us to begin to think about how we can put these components on a shelf alongside our services, and open up a marketplace for wealth managers. In addition to the services that we can make available through the SEI Wealth Platform, we’ve also got tools and services that we can drag from the data into the Platform, making it very rich and flexible. For me, it’s about how we can reuse the services that we utilise as a group and repackage them for our clients’ development. This approach will challenge some of the way we work today, but what I like about SEI is that it is an organisation that is not frightened of a challenge – we have a focus around innovation and thinking about new ways of doing things. For me, that is the exciting thing about SEI’s work.

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