SEI (NASDAQ:SEIC) is a leading global provider of investment processing, investment management, and investment operations solutions that help corporations, financial institutions, financial advisors, and ultra-high-net-worth families create and manage wealth.
The SEI Wealth Platform is an end-to-end wealth processing and wealth management service providing technology and operational outsourcing. Delivering front, middle and back office services within a single infrastructure; the proposition supports the entire firm and customer lifecycle with embedded workflows from prospecting to onboarding to investing to re-advising customers.
Built on a single configurable code base, the platform provides efficiency and cost savings combined with the ability to offer tools tailored to specific business segments (e.g. Portfolio Management or Adviser Desktop Tools) and to integrate seamlessly with other technology providers of a client’s choice.
Thought leader: Brett Williams, CEO of SEI Investments (Europe) Limited, Managing Director of SEI Wealth Platform UK
Managing Director for SEI's UK Private Banking business, Brett is responsible for the development and growth of the SEI Wealth Platform in the UK.
Working in close partnership with wealth managers, Brett focuses on optimising the SEI Wealth Platform capabilities to complement each client's core strengths along with pursuing continuous innovation to enhance solution development.
Brett has over 30 years of leadership experience in the financial services industry, including Chief Executive Officer roles at Selestia, Cofunds and Skandia UK.
What is your view on the current state of the market with regards to how wealth managers are managing their investment portfolios. What are they doing well, what are the challenges, and what areas could be improved?
Although we have seen an increased use of technology across the UK wealth management industry, many firms still haven’t fully embraced the benefits of technology as a facilitator to operating their business in an efficient, scalable, robust and sophisticated way. UK wealth managers can find themselves lagging behind their counterparts in other regions, such as Switzerland, where firms have been quicker to embrace technology. Some are still using old legacy systems and traditional, spreadsheet dominated processes, to manage their investment portfolios. For example, there are countless examples of firms utilising hundreds of spreadsheets to cover their model portfolios.
For those firms still using traditional portfolio management processes there are significant challenges:
Administration burden
Front office staff are crucial in delivering organic growth. Time spent on manual, administrative processes can distract focus from creating competitive advantage for their firm by cultivating the relationships that are fundamental to the growth of the business. Additionally, these tasks may reduce job satisfaction which could result in good quality investment managers leaving, often taking clients with them.
Greater need for personalisation
Firms need to be in a position to efficiently deliver their central investment philosophy but customisation is becoming increasingly important to clients. Clients are becoming more educated in investments, with increased information at their disposal, resulting in more complex requirements. Delivering a highly personalised service without technology can be particularly time-consuming and not scalable, requiring firms to consider additional headcount as client lists grow.
Risk of inconsistent outcomes
Highly manual processes can increase the possibility that clients could receive inconsistent investment outcomes. This potential irregularity is a key risk for firms, given the importance the regulator places on providing consistent client outcomes.
Lack of oversight
Inconsistent processes and document tracking can result in a lack of access to data across the firm, creating challenges for senior management in having oversight of the firm’s performance as a whole. These oversight challenges only increase for larger, global firms operating across multiple jurisdictions
Why should wealth managers look to use or increase the use of technology in how they manage their investments. What factors are influencing the move and what benefits those enhancements could bring?
The right technology provides a strong foundation for modern wealth managers to more efficiently deliver their value proposition to clients, ultimately offering greater potential opportunities for growth.
Increased efficiencies and scalability
As firms face increasing cost pressures, technology allows them to meet the challenge of providing wealth management at scale. A robust foundation of technology can enable efficient delivery of their value proposition to their clients without the need for additional resources as they grow.
Personalisation at scale
Portfolio management technology can balance the use of a central investment philosophy with the need to personalise for an individual client, to meet their unique goals, their tax preferences or their need to avoid certain types of investments. Using a tool that helps deliver this personalisation at scale can also open up further growth opportunities for wealth managers, allowing them to service clients with more complicated requirements than before. Additionally, technology can ensure that centralised investment thinking is used across the firm, helping to deliver standardised outcomes for similar clients across the firm.
Improved access to data
The right solution provides access to data, in a usable format that can be analysed to help enable improved business decisions. These solutions help to enable greater oversight and standardised processes, whether the model is centralised, decentralised, global or local.
Meeting the changing demands of client and employee
As the demographic of both the client and the employee changes there will only be greater pressure on wealth managers to increase their use of technology as this will be an expected part of their experience. The next generation of wealth managers will be increasingly accustomed to using technology and open to challenging their firm in this area.
What opportunities do you see for wealth managers to more effectively use technology to better manage their investment portfolios and what actions should firms take to move forward in this area?
Process changes and new technology can result in some resistance within firms. The attitude of senior management is crucial to the success of any technology implementation. There needs to be a top-down adoption for any new technology, with executives supporting and driving the change by encouraging staff to embrace the new processes and clearly articulating the benefits that the right technology can bring as a foundation for growth.
Crucially, before selecting technology or a technology partner, firms need to be clear on their objectives. Ineffective or legacy technology which drive internal processes can often be used as a vehicle to hide behind, providing an excuse for bad business performance. Remaining outcome-driven and not process-driven is critical to ensuring that the correct solution is chosen. It is possible to become distracted by processes during the selection but trying to shoehorn an old process into new technology may fail to deliver the desired outcomes.
Finally, technology should be chosen carefully to ensure that it can integrate with current systems. Firms could face challenges when trying to implement a new wealth management system and integrating this with legacy technology is likely to raise its own unique challenges.
What solution(s) does your company offer the market and how do they help wealth management firms manage their investment portfolios better?
SEI believes there are six stand out problems for modern wealth management firms that our solution aims to address:
- Manual processes and lack of efficiency
Administrative processes distract wealth managers from focusing on the end client - Inability to scale
Legacy systems can prove costly and difficult to maintain with the higher demands of the modern wealth management client - Reduced ability to facilitate or support growth
Traditional solutions can struggle to offer the flexibility to efficiently service clients with more complicated needs, limiting growth opportunities - Lack of consistent client engagement
Lack of integration and flexibility between proposal generation tools, portfolio management systems and performance reporting - Lack of effective investment oversight
Impairs ability to understand effectiveness of investment decisions and implementation - Regulatory challenges
Ever-increasing regulation along with required speed of compliance means the solution needs to be adaptable
Our solution delivers infrastructure that supports client onboarding and mandate creation, portfolio administration and management as well as performance reporting and oversight.
The SEI Wealth Platform’s Portfolio Manager Experience (PME) streamlines the portfolio management process and automates administrative tasks that have previously been undertaken by client-facing teams. Portfolio administration, management and monitoring infrastructure allow firms to efficiently deliver their investment best thinking, across centralised or decentralised models and on a local or global level. The flexible system supports new growth, client types and propositions (models, bespoke, both internal and external managers and fund businesses).
PME provides a holistic view of an investor’s investments, enabling the advisor to engage with the client through multiple touchpoints. It also provides complex portfolio management including households and tax management supporting all major asset classes and multi-currency for processing and reporting purposes. PME allows our clients to recognise the specific needs of the end-customer and deliver a personalised experience at scale.
PME is event-based in its nature, focusing on the experience of a portfolio manager and their working day. Developed by spending time with portfolio managers to understand how they work, we identified events that may require investment action as they appear, helping portfolio managers ‘organise’ their day and stay on top of accounts through monitoring tools that enable effective management. Without this, it can be difficult to identify accounts requiring attention, leading to a less effective approach to workflow management.
Investment oversight tools, which include PME and performance reporting alongside SEI’s integrated business reporting solution, provide pre and post trade monitoring capability enabling firms to monitor the effectiveness of the delivery of their investment best thinking, in line with their agreed client mandate. This supports them in achieving consistent outcomes. This can be deployed at a local or global operating level, as demonstrated by one of our recent global clients who operates across nine geographic regions.
Our portfolio management and performance tools come together to allow firms to address their reporting needs. Additionally, we understand the increasing regulatory pressures our clients are facing and actively support them to meet their compliance requirements whilst minimising the cost of regulatory reporting. For example, we have developed regulatory services, such as 10% depreciation reporting, that are designed through a collaborative process with our client community.
Deployment and development
The Portfolio Manager Experience (“PME”) is available for clients of the SEI Wealth Platform. Portfolio management is delivered as part of the full end-to-end SEI infrastructure. Our clients see the benefits of a fully integrated system, vendor consolidation along with consistent and established processes.
SEI is pivoting to a new technology strategy, ‘One SEI.’ Enabled by data management this leverages open architecture and modular components from across SEI’s multiple platforms. As a result, in the future it is likely that PME could be delivered as a standalone component. UK clients of the SEI Wealth Platform are already benefiting from this modular approach by utilising ‘SEI Trade’ offering materials, transaction documents and on-boarding forms electronically.
Other developments include the introduction of our API Gateway with APIgee providing self-service APIs for integration into front-end systems. One Platform client is utilising more than 67 web services and piloting full on-boarding for end clients demonstrating both collaboration and innovation in this area.
Additionally, in a strong example of our innovation and development, we are currently bringing together existing and new technologies at SEI to provide a full end-to-end service (from order initiation to settlement and price collection) for hedge fund processing for a Global Private Bank. We are building a brand new Order Management System specifically for the management of hedge funds, enabling firms to create and manage an internal secondary market for their customers. We are then integrating existing SEI technology to digitise the execution management of a traditionally paper process.
This article is from The Wealth Mosaic's report on how technology can be used to improve the management of investment portfolios. Access the full report here.
