It’s been a busy start to the year, beginning with the publication of the FSA guidance consultation paper on assessing suitability of the risk a customer is willing to take. Welcomed by us, the paper supports several principles that we have consistently advocated over the last seven years.
A number of clients have thanked us for the swift response we issued that week and for the support that we have given them since. Assessing attitude to and capacity for risk is at the heart of our planning tools and while we are comfortable that effective use of Dynamic Planner already meets the FSA’s guidance on good practice, we think we can be even better. You can read more about our development plans in the ‘risk profiling’ section below.
Turning to client activity; we are pleased welcome new clients, Thomson On-Line Benefits and Apollo Asset Management, who joined us at the end of 2010, and that existing clients SimplyBiz, recently announced a 1,000 licence extension with us.
Last month, our User Group was attended by representatives from almost all of our clients, giving us a great opportunity to share our thinking and latest developments, whilst gaining valuable feedback at the same time and we supported Openwork at their recent annual conference.
As a result of this activity and other extensive client projects in which we are the technology delivery partner, I am pleased to report that DT continues to go from strength to strength and this is reflected in our financial position.
In this bulletin, you’ll find more details of our plans for risk profiling, extending the asset classes, product roadmap and a summary of our winter release. If you would like to discuss anything we have mentioned, please do get in touch with me or the team.
Kind regards
Ben Goss, CEO
An asset class should comprise assets that are homogenous, distinguishable (with no ambiguity about classification), mutually exclusive, able to be modelled and recognised as a class by the leading data suppliers.
For some time, we have had requests to extend our asset classes to include some of the more popular investments, such as hedge funds, structured products and commodities.
We are pleased to announce that our Q4 2010 review introduces two new asset classes for portfolio x-ray analysis; hedge funds and commodities.
Example summary returns from our Q4 2010 assumptions are shown in the following table:
| Asset class | Expected Real Returns | Expected Nominal Returns | Volatility |
|---|---|---|---|
| UK Equity | 3.9% | 6.5% | 19.5% |
| Commodities | 4.0% | 6.6% | 23.0% |
| Hedge Funds | 2.4% | 5.0% | 11.0% |
Please note that the new asset classes will not be included in the standard risk level asset allocations on the Platform.
Firstly, including them with portfolio x-rays means we can support users that have or would like to gain exposure to them, without imposing them on all our clients.
Secondly, it takes into account the FSA’s view that customers should understand the drivers of return and sources of risk for those asset classes recommended to them. In our view, hedge funds are often complex investments and should not at this time be included in our standard risk level asset allocations.
Please talk to your Client Director, if you would like to find out more about asset classes and our quarterly updates.
Against the backdrop of considerable change in the financial services industry, we are pleased to report a successful first six months of our financial year and continue to enhance our financial strength.
The highlights of our first half year include:
Neil Stevens, Joint Managing Director at SimplyBiz, says “Our members are attracting and retaining more business, improving compliance standards and saving time using the ‘Compliant Investment Process’. We have been very pleased with the take-up of ‘Dynamic Planner’, as the number of members adopting the services has increased rapidly since launch. We are delighted to further extend the license agreement as part of our commitment to the firms we serve.”
Our User Group on 26 January was well attended by advisory business, asset management and provider clients alike. The agenda included: the FSA assessing suitability of risk paper, our product roadmap, new developments, asset class extensions and how to encourage effective use of Dynamic Planner. A number of these topics are also covered in this bulletin for those unable to attend and our thanks go to Seven Investment Management for providing the venue.
As we mentioned at the start of the bulletin – we welcome the FSA focus on risk profiling and assessing suitability in general. While we are comfortable that what we offer today already means that the effective use of Dynamic Planner meets the FSA’s guidance, we think we can do even better. As a result, we are currently working on how we can enhance our risk profiling tools and supporting collateral to ensure that advisers have all the necessary support to meet the FSA good practice requirements (and more). This is scheduled for our Spring product release and we will provide more details in our March email to clients.
Following the January release, our Winter round-up of additions and improvements to Dynamic Planner is now complete. Amongst these are:
If you are interested in adding any of the above features or upgrading to the Enterprise version of Dynamic Planner, please contact us.
At DT, our vision is “a world in which everyone digitally plans and manages their long-term finances” and our mission is “to enrich the financial relationships our clients have with their customers”. Our roadmap outlines the goals we have set out to achieve these.
Our roadmap identifies four core areas:
We have defined long term objectives for each of these areas and plotted a number of initiatives over the next 12-18 months that will help us to achieve our goals and make sure our clients are ready, ahead of RDR.
Amongst those scheduled for the phases 1 and 2 are:
If you would like further details of the roadmap or to find out which developments may benefit your business, please contact your Client Director.
In response to feedback from our monthly ‘health checks’, we will be improving our QEU reporting process for enterprise clients later this year. This should result in shorter turnaround times and an improved and consistent output display. We will keep you updated with our progress.
23/02/11
