Client ReportingExceeding expectations for a brighter future

Some thoughts from Kurtosys

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A perfect storm of market forces = A new era in client reporting

Margin Squeeze

Tech. advances

RegulationEmerging markets

Need to restore investor

confidence

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Wealth Management

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Margin Squeeze

DriversMarket Volatility / shift to ETF & passive investments / fee pressure

EnablersLess than total cost of ownership

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Tech.Advances

Drivers• Growth of mobile • Cloud Computing• User Experience

Imperatives• Real time communications• Intuitive reporting• Interactive tools

EnablersScalable cloud based platforms with mobile capability

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Regulation

DriversBasel II / Dodd-Frank / RDR

ImperativesAgile reporting abilities, ability to offset higher compliance costs

EnablersBetter data management

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Emerging Markets

DriversShift of wealth to the EastGrowing asset class

ImperativesHeavier infrastructure needs

EnablersA global solution

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Need to restore

investor confidence

DriversFinancial Crisis / Madoff / Eurozone uncertainty

ImperativesBetter understanding of riskAnalysis toolsInc. transparency

EnablersAdv. Data analyticsMulti-channel approach

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To serve a new era of web-savvy clients, whose expectations are high

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Currently, Advisors lose an estimated 49% of AUM during generational wealth transfer.

World Wealth Report, 2011

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In Asia-Pacific – excluding Japan – 41% of HNWIs are 45 years old or younger.

The proportion of wealth controlled by females is rising

Emerging demographics may have different needs to long-standing HNW clients.

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Rapid changes in HNWI’s needs are driven by geography & technology

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India’s HNWI

population

entered top 12

for the 1st time

The population of HNWIs in Asia-Pacific

(3.3m individuals) is

the 2nd largest in the world –

beating Europe for 1st time in

2011

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Clients in BRIC countries are tech savvy and internet enabled

“Firms could lose AUM if they fail to meet the needs of emerging HNWI Demographics”Source: World Wealth Report, 2011

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Although revenues have bounced back well from the financial crisis, rising costs and market volatility means that overall profits are flat.

Operational efficiency has now become vital for success.

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Reporting is an opportunity to differentiate & exceed expectations

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Enhanced client reporting can...

Attract & retain AUM

Make compliance

a differentiat

or

Reduce operational

costs

Providing an opportunity to meet a genuine client need whilst also

directly improving profitability & efficiency.

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Historically, the investment has been there....

Banks spend a higher % of total costs on IT than all other major industries

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But IT spend hasn’t translated into better performance....

Which may be driven by the lower % of purchased software vs. spend on in-house software development

Resulting in a productivity paradox

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An evolving model for wealth management, places greater emphasis on client reporting…

• Transpare

nt

• Interactiv

e

• Flexible

• Effective

• Beautiful

Improved

Asset

Allocation

Firms MUST have

clear differentiators

to attract & retain

AUM

Client Reportswhich are more....

Greater focus on:

• Retaining AUM

• Excellent customer service

/CRM

In response to higher & higher

client expectations....

ResearchProduct

ManagementSales Investment Management

Ongoing sales

Day-to-day account management

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Investors genuinely value client servicing

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Client service is the single most important driver of investor satisfaction

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Making it a key selection criteria for new clients

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Source: IBM: Next Generation Wealth Management White Paper

“The future promises significant changes that will boost client reporting to a new level, offering real-time access, customization, integration, interactivity and control.”State Street

Importance to customers

Income

Expenses

Business

Reduced Operational

risk

Reduced Key Person Risk

Market Responsiveness

Faster reporting

Accuracy

Operational efficiency

Reduced IT Spend

Efficient use of staff

Straight-through processing

Single view of fund

performance

Higher retention %

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Which increasingly means partnering with an external provider

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“A growing number of wealth managers are looking to the support and resources of experienced external providers. Often, these partners hold the key to delivering the world-class service the ultra-affluent market expects.”State Street

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Evaluate

• References

• Credentials

• Client list

• Level of support

• Cost

• Global capability

External providers

And remember to look at the total package... You are NOT buying “just” an application...

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Benefits

• Build reliable reports rapidly

• Pull accurate data from multiple

sources

• Show clients, at a glance, how their

portfolios are performing

• Tailor information to individual

needs

• Perform what-if analysis

• Deliver real time, any time

information over the web

• Offer a rich & dynamic user

experience

“80% of firms have invested in technology to support client reporting.”

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To find out more about transforming YOUR client reports

New YorkTel: +1 (646) 380 3877adam.drexler@kurtosys.co

m

Get in

touch

LondonTel: +44 (0)20 8605 9770paul.fawcett@kurtosys.co

m

About Us

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Kurtosys is a global provider of digital marketing and client reporting tools that help asset managers attract and retain investor assets. Since 2002, our team of industry experts has been using digital media to transform the way that financial information is presented, shared and consumed.

Kurtosys offers a broad range of fund marketing and investor servicing solutions – from Fund Factsheets and Fund Tools to Client Reporting and Secure Portals. We help brands connect with their clients using the power of online and mobile communications. Our robust infrastructure and outsourcing services help eliminate unnecessary workflows and reduce costs; and our design services are dedicated to making financial data beautiful.

Headquartered in London, Kurtosys has offices in New York, Cape Town, Gurgaon (India) and Manila. Our presence spans five continents and our clients include some of the world’s largest asset managers.

We believe that a digital revolution is changing financial services. We think technological advantage, operational efficiency and outstanding communication are the keys to success.

Information sources

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Cognizant, Asset Management: Reinventing Reporting For the New Era of Transparency and Compliance http://www.cognizant.com/InsightsWhitepapers/Asset-Management-Reinventing-Reporting-for-the-New-Era-of-Transparency-and-Compliance.pdf

Ernst & Young, Wealth Management Study, 2011: Investing in the futurehttp://www.ey.com/US/en/Industries/Financial-Services/Asset-Management/2011-wealth-management-study---investing-in-the-future---Technology-people-and-processes

Hubbis: Making client reporting a key differentiatorhttp://www.hubbis.com/articles.php?aid=1325819880

State Streethttp://www.statestreet.com/wps/portal/internet/corporate/home/aboutstatestreet/newsmedia/newsarticles/newsarticledetail/!ut/p/c4/fY7NasJAGEWfZlZZzJcfk7E7C1pqrVpF0GyG-fmSDCYTmZmqfftG6qJIKXdxLxy4HFrSIVacTS2C6a1o6Z6WOV_uNsCe4wmw9QvA6xuD2ehjlsJ7TA-0LH7x1YoNPJlu4_kuAcjpnJZ128vh6UAPTQinJwIEFig0Or_EiydAy1vziQtGtej5WoSG7glcVNcaybtj4MYGdBYDV_2wbCCg-q7rLQG83ohoIzt8RF4Q8L7-GWOZgc4AsnGKMapYIMuqKkskS6BIU_2f0fSK6jOYM_I7-MvKN8KhfnSKeqeNFe4ruoPIm4AEpOlrJ06NwbteXmSjdNDLNYsRUCZKVQWTTOgxskLRLVq-29LTcdOeF9XkG7KLbrk!/

World Wealth Report 2011, Capgemini & Merrill Lynch Wealth Management