Monday 14th December 2020
Riding the digital wave
Franklin Templeton and Quantifeed’s plans to lead the digital advice sector
Alex Ypsilanti, CEO and co-founder of Quantifeed, and James Verner, vice-president, digital strategy and wealth management at Franklin Templeton, spoke with The Inside Network’s Peter White about the new partnership and their first big project.
These days you don’t get very far in terms of solutions without digital being part of the mix in one way or another. So when Franklin Templeton acquired Quantifeed in the Legg Mason deal, it was a perfect convergence of thoughts on how they could leverage content across the likes of the Asia-Pacific, Australian Markets and eventually globally.
The topic of digitalisation is more relevant than ever for anyone from millennials, to wealthy individuals and retirees looking into their retirement income solution with a focus on risk management.
Asia is expected to be a key focus as it has already been experiencing massive growth, it is expected to record two-thirds of all middle-class living by 2030 and US$37 trillion ($49.2 trillion) in total assets over the next five years. So, it’s no surprise that this is where Quantifeed aims to begin offering a digitally delivered wealth management service.
Verner adds, “The offering allows us to move away from being solely a product provider to much more a solution and focused on customer outcomes.”
For Quantifeed it will be a bit of business-as-usual, but turbocharged by Franklin Templeton, really using technology to contour the capabilities with traditional channels. A prime example is the recent announcement of partnering with a Singapore-based gaming organisation called Razor, which will begin with a focus on Asia but with the long-term goal of moving globally.
Quantifeed is relatively new to the game, having been established seven years ago by Alex and his business partner Ross Milward in Asia, but has since expanded to Sydney, Tokyo, India and Hong Kong.
“The part that is getting us really excited is the mass-affluent segment: the only way that wealth management can be serviced is digitally and the existing and incumbent financial institutions have a big head start on that.”
Both Franklin Templeton and Quantifeed are pleased to also be receiving strong support from pre-existing consumers, who are generally millennials and first-time investors. This reflects the fact that it’s simple and user-friendly for new investors to pick up and understand, and that this group is actively looking for better solutions.
Not only for Quantifeed and Franklin Templeton but for the majority of the financial institutions, it’s not so much about selling a product to the people anymore, but looking into ways to package the product into solutions for consumers that already have the banking side figured out, but not so much the wealth management aspect.
It’s about bringing in digital solutions that can convert the pre-existing relationships into wealth management ones and deliver the whole package from the beginning of their investment life.
Digital Advice in the Australian Market
Australia represents the largest pool of retirement cash in the world, but the digital advice trend has been slow entering the Australian market.
According to Verner, this could simply be because it is so expensive, especially for younger millennials, to get proper advice: there is a gap between the ones that can afford it and the ones that need it the most, but who cannot afford it. Add the high regulatory levels surrounding the provisions of advice, resulting in barriers having been put up within the market, and investors looking to get involved.
One of the hardest topics that wealth management is grappling with at the moment, is how to help advisers and end-consumers understand what exactly a sustainable income can and should look like in retirement.
Data Aggregation
The team at Franklin Templeton and Quantifeed see a big opportunity in open banking, being with their customer every step of the way from the first stages of building and planning a balance sheet, right through to their retirement and giving advice for any problems or challenges that arise.
The change in offering is allowing advisers to tackle consumer needs from all aspects; while the younger generations will be (and already are) a lot more open to the idea of digitisation, of course some seniors who are not as tech-savvy will still want that face-to-face meeting.
The industry has changed quite a bit over the last decade, where it used to be very focused on selling direct product to consumers without involving the advisers in the process. Now, though – and this is something that will be employed by Franklin Templeton and Quantifeed – the focus is to bring a more holistic approach and offer support to consumers throughout each step of the process, with whichever approach they prefer, whether that means keeping the relationship a little bit traditional or really embracing the digital and new technology.
So, with the two big-name brands coming together and somewhat re-inventing the wealth management and advice sector, where is this sector heading in the next five to ten years in Australia?
If James Verner and Alex Ypsilanti are on-the-money, every wealth management institution will have to have some sort of digital offering. While it may not yet be at 100% digital, a large proportion of customer journeys will definitely be operating under the digital platform.
Abbey Minogue is account director at Capital Outcomes.
