merrill lynch banking & financial services conference · merrill lynch banking & financial...
Post on 05-Jun-2018
233 Views
Preview:
TRANSCRIPT
AllianceBernstein® and the AB AllianceBernstein logo are trademarks and service marks owned by AllianceBernstein L.P.
Merrill Lynch Banking & Financial Services Conference
November 12, 2008
David SteynExecutive Vice President
Global Head of Client Service and Marketing
Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein1
Cautions regarding Forward-Looking StatementsCertain statements provided by management in this presentation are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. The most significant of these factors include, but are not limited to, the following: the performance of financial markets, the investment performance of sponsored investment products and separately managed accounts, general economic conditions, future acquisitions, competitive conditions, and government regulations, including changes in tax regulations and rates and the manner in which the earnings of publicly traded partnerships are taxed. We caution readers to carefully consider such factors. Further, such forward-looking statements speak only as of the date on which such statements are made; we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements. For further information regarding these forward-looking statements and the factors that could cause actual results to differ, see “Risk Factors” in Part I, Item 1A of our Form 10-K for the year ended December 31, 2007 and Part II, Item 1A of our Form 10-Q for the quarter ended September 30, 2008. Any or all of the forward-looking statements that we make in this presentation, Form 10-K, Form 10-Q, other documents we file with or furnish to the SEC, or any other public statements we issue, may turn out to be wrong. It is important to remember that other factors besides those listed in “Risk Factors”and those listed above could also adversely affect our revenues, financial condition, results of operations, and business prospects.
Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein2
We improve investor outcomes by our actions and those of our partners
We do so profitably and sustainably
”
This is a good time for rigour, to look at what you want to come out with at the other end of the tunnel. This is not a time to skimp on resources but to focus them on your best businesses: stop the weakest, invest in the strongest.
Jack WelchFinancial Times–July 26, 2008
“
Our Best Businesses are (or will be) ones where:
Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein3
Our Business
Invest
Sustainable Profitability HighLowA
lignm
ent
Hig
hLo
w
Manage to Improve Profitability
Divest Manage to Improve Alignment
Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein4
Institutions
PrivateClients Retail
That Was Then
Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein5
Shared Offices
SPMs
Latin America
Endowment & Foundations
This Is Now
Client Communications
Training
Planning & Analysis
Pooled Vehicles
Regional Sales Managers
BDM’s & Investment Directors
Sub-Advisory
Defined ContributionPrivateClients
Institutions
Retail
Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein6
AUM by Service
Revenue by Service
AUM by Client Domicile
Non-US47%
US53%
That Was Then: Our Story in 2007
Non-US59%
US41%
Non-US68%
US32%
Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein7
This Is Now
Demographics Globalization
US Pension Protection Act
2006
FAS 158
UK Pensions Act 2004
FRS 17
Regulation & Accounting Financial & Technological Innovation
“One World Portfolio”
Alpha-Beta:Isolate, Integrate and ImmuniseVolatility
Longevity
Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein8
The Changing Face of Our Business
Unique Risk
Pooled Risk
Not Rich Rich
High Net WorthIndividuals/FamiliesIntermediated Savers DC Participants
DB Plans
Beta Sensitivity Alpha SensitivityBest Advice
High Net WorthIndividuals/FamiliesIntermediated Savers DC Participants
DB Plans
Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein9
Not Rich
Unique Risk
Pooled Risk
Rich
High Net WorthIndividuals/Families
The Changing Face of Our Business
Intermediated Savers
DB Plans DC + DB Plans
Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein10
The Changing Face of Our Business
Source Alpha Platforms Assembled Advice Platforms
Anchored to Market Outcomes
Global
SingleCountry
Global+
Emerging
130/30
Currency Overlay
Anchored to Client Outcomes
CustomizedRetirementStrategies
LDI
RetirementStrategies
WealthStrategies
Global Retirement Strategies
Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein11
Source: McKinsey Analysis
US DC AUM Projections$ Trillions
2006
$4.1
Asset Appreciation (at 6.1% CAGR)
$3.0
2015
$7.5–8.5
Inflows
$3.3–4.4
3.0–4.0
0.20.1–0.2
New PlansNew Participants
New Contributions
Outflows
$(2.6–3.8)
0.3–0.5
2.3–3.3IRA Rollovers
Withdrawals
The Changing Face of Our Business
Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein12
The Changing Face of Our Business
Past
Simple Technology
Hard to use
Expensive
Future
Complex Technology
Easy to use
Inexpensive
Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein13
No guidance, expansive choice
Company stock, stable value
IRA rollover and withdrawals
Participation and deferral rates
Record keeper controlled
Past
Automation, focused choice
Low-cost custom target-date funds
In-plan guaranteed income
Retirement income adequacy
Best-in-class open architecture
Future
Plan Design
Accumulation
Decumulation
Plan Metrics
Providers
The Changing Face of Our Business
Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein14
The Changing Face of Our Business: Back To The Future
Source: AllianceBernstein
SimpleParticipation
Low Cost
SecureLifetimeIncome
1
2 3
4
“Plug and Play” Multi-Manager Structure
Cost-Efficient Institutional Vehicles
Well-Researched and Documented Design
Customizable to Plan-Specific Needs
Consulting and Project Management
Full Suite of Communications Content
Integration of Design Within Target-Date Structure
Clearing House for Insurers and Recordkeepers
Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein15
Why Is Partnering So Important?
Record Keepers Asset Managers Insurers
Investment Only
Customized Retirement Strategies
Secure Retirement Strategies
Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein16
Why Is Partnering So Important?
Investment Only
Record Keeper
Investment Manager
Investment Manager
Plan Sponsor
Investment Manager
AB
Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein17
Why Is Partnering So Important?
Customized Retirement Strategies
Record Keeper
Investment Manager
Investment Manager
Plan Sponsor
Investment Manager
AB
Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein18
Why Is Partnering So Important?
Secure Retirement Strategies
Record Keeper
Investment Manager
Investment Manager
Plan Sponsor
Investment Manager
AB
Insurer
Insurer
Insurer
Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein19
Employer-Based Defined Contribution Plans
Source: SPARK Marketplace Update, 2008
$725
$300$230 $170
$2,860
Total Assets: $4.1 Trillion
457
401
403(b)
SEP, SIMPLE, Solo(k)
Federal Employees Thrift Plan
Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein20
Employer-Based Defined Contribution Plans
Source: SPARK Marketplace Update, 2008
$300$230
$2,860
$170
$725
Total Assets: $4.1 ^ Trillion$3.7
457
401
403(b)
SEP, SIMPLE, Solo(k)
Federal Employees Thrift Plan
Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein21
Employer-Based Defined Contribution Plans
Source: SPARK Marketplace Update, 2008
$1,430
$170
$725
$1,430
$ 1,600Existing Sales Force (Supported by ABDC)
$300$230
Total Assets: $4.1 ^ Trillion$3.7
$2,155 ABDC Sales
457
401
403(b)
SEP, SIMPLE, Solo(k)
Federal Employees Thrift Plan
Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein22
BernsteinAdvisors
ABIAdvisors
US DC StrategyPlan Size: $0-50M $50-300M $300M+
AUM: $1.1 Tril. $0.9 Tril. $1.7 Tril.
ABDCAdvisors
$3.7 Tril.
InstitutionalAdvisors
Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein23
US Private Client Strategy
2003 Five Year Growth Plan:
Expand local market presence to covermajority of US wealthy households
Grow Advisor staff from 175 to 350
Explore international markets December 31, 2003
June 30, 2008 CAGR (%)
AUM $51 Billion $100 Billion 16.1%
Client Relationships 21,000+ 33,900+ 11.3%
Advisors 166 330 16.5%
Offices 11 19 — US Coverage of Wealthy Households 35% 60% —
US Square Footage 176K 369K 17.9%
Existing Offices 176K 287K 11.5%
Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein24
US Private Client Strategy
One dot = 250 households with > $2MM in investable assetsSource: Claritas 2008
Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein25
Expansion Options: Evaluation Factors
Hig
h Le
vera
ge o
f Firm
Res
ourc
es
Effective New Advisor Development Environment
Existing Offices
AffiliatedOffices
New Markets
ResidentAdvisor
Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein26
US Private Client StrategyM
argi
n
Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein27
US Private Client Strategy
2007 Revenue Per Advisor*2007 Average AUM Per Advisor*
$ In Millions
*Excludes Advisors hired during the calendar yearSource: Bernstein
$445
$105 $104 $90
Bernstein MerrillLynch
SmithBarney
MorganStanley
$4.0
$0.8 $0.8 $0.7
Bernstein MerrillLynch
SmithBarney
MorganStanley
top related