Corporate Wrap The Future for Workplace Benefits. Global Trends in Corporate Wrap

Transcription

1 Global Trends in Corporate Wrap TISA Corporate Wrap Seminar: 1 October 2009 Kevan Ward Bravura Solutions About Bravura Solutions Global supplier of Wealth Management software Pensions, Investment, Life insurance, Wrap Portfolio administration, i ti Transfer Agency 180 corporate clients globally UK, Europe Australia, New Zealand Hong Kong 180m individual accounts 740bn funds under administration 80 1

2 Agenda What is Wrap? What is Corporate Wrap? Is it a Global development? Are there any Trends? 81 What is Wrap? A wealth management platform Typically mass-affluent clients Aggregates multiple product wrappers Allows trading within & between these products Easy access, single view of a client s assets Simplified reporting & administration Advisers, providers, clients 82 2

3 Agenda What is Wrap? What is Corporate Wrap? A Global development? What Trends are there? 83 What is Corporate Wrap? A work-place financial planning platform for employees Covers work related (and other) benefits Pension, ISA, share plans, healthcare, life cover... Bank account, mortgage, loans, credit card... One-stop-shop for viewing, evaluating & trading Payroll deduction 84 3

4 What is Corporate Wrap? The employer becomes the hub Not the provider... or... the adviser Broader client base (includes less affluent) Limited ( generic ) advice Planning tools, calculators, information, education Potentially helps to integrate flex-benefits 85 Agenda What is Wrap? What is Corporate Wrap? A Global development? What Trends are there? 86 4

5 A Global development? 87 A Global development? 88 5

6 USA Birthplace of Worksite Marketing Originally a blue-collar offering High-cost / poor value products Technology & competition Today 20% of new insurance premiums 89 USA protection sales : $ % 90 Source: Eastbridge Consulting Group 6

7 USA 2008 sales - Product mix 91 Source: Eastbridge Consulting Group USA 2008 sales - Employer coverage < 10 < Source: Eastbridge Consulting Group 7

8 A Global development? 93 Australia Wrap market primarily Pension driven Some non-pension saving Driven by compulsion in the early 1990 s 94 8

9 Australia FUM volumes A$ 1550m A$ 245m A$ 1150m A$ 180m 95 Australia Superannuation net flows by fund type* - $ millions 30,000 25,000 20,000 Retail funds SMSF Industry funds 15,000 10,000 5, ,000 Public sector funds Corporate funds -10, * Years endi in March Note: SMSF data is July 2006-June 2007, APRA only release annual netflows for SMSF 96 Source: Australian Prudential Regulation Authority 9

10 Australia Wrap market primarily Pension driven Some non-pension saving Driven by compulsion in the early 1990 s Maturity of wrap market Fringe benefit tax Too many eggs in one basket 97 A Global development? 98 10

11 UK Demographics Lack of provision 99 UK Pension coverage 33% 100 Source: Office for National Statistics / Pension Trends 11

12 UK Pension coverage 17% 101 Source: Office for National Statistics / Pension Trends UK Total new individual Term Assurance sales 102 Source: Swiss Re Term Health Watch

13 UK Total new individual Income Protection sales 103 Source: Swiss Re Term Health Watch 2009 Demographics Lack of provision Stakeholder No employee compulsion Personal Accounts 2012 (or 2015 / 16 / 17??) Auto enrolment

14 UK Pressure on Distribution Retail Distribution Review (CP121 before this) Consolidation seems inevitable IFAs to service HNW / What about Low to Mid Net Worth? Providers looking for alternative distribution Advisers looking for efficiency / value EBC s looking at their business model 105 Agenda What is Wrap? What is Corporate Wrap? A Global development? What Trends are there?

15 US Trends Primarily protection products Life / disability Very limited it savings / investment t (outside 401k) Technology Driving awareness... not enabling sales Commission rates increasing!! 107 Source: Eastbridge Consulting Group Australian T Investment choice Cost pressures Advice... commission to fees Admin... FUM fees (bps) to transaction fees Focus on efficiency Technology / STP

16 UK Trends Demographics Cost of advice increasing / Provision of advice reducing Lower cost option Alternative model Voluntary compulsion 109 Trends consumer habits Era Builders Boomers Gen X Gen Y Age now Beliefs, values & motivations 60s & 70s Security, work ethic, country, advancement 50s & 60s Variety, freedom, achievement 30s & 40s Lifestyle, fun, community, self discovery Television No TV I Love Lucy Happy Days Music Gramophone 78s Relationship LPs & EPs Cassettes & CDs Technology 20s & 30s Class of values, no absolutes, relational Big Brother Digital ipods & MP3s Money Scarce Earn it It is not everything Give it to me Technology Ignorant of it Aware Comfortable Live it, breathe it

17 Conclusions This time it may work... Voluntary compulsion Protection rather than investment Distribution pressures Efficient & effective systems are essential Low cost / STP Aggregate view 111 Thank you kward@bravurasolutions.com