Some of our reflections in Financial Simplicity from 2024…
First of all thank you to all our clients and partners for your business and advocacy. Without you the opportunity to help provide value to and help improve investor experiences and the industry would not be possible.
Other key points:
- We increasingly realise the what Financial Simplicity is about is not only productively and scalably help wealth managers manage personalised portfolios at scale, but also provide them confidence that they continually have the right assets in the rights portfolios. We have coined the phrase ‘portfolio assurance’ to reflect this aspect of what we help firms with providing them, their management and those who oversee them with confidence.
- In 2024 we recognised that we can do more to help investors get the most benefit from investing, and we started work on our latest algorithmic model with more enhancements to create more personalised portfolio experience for investors. This includes considerations of multi-account, multi-entity portfolios with their own mandate considerations provided in a unified single algorithmic call. This means that with Financial Simplicity the notion of systemising the management and assurance of high net work portfolios with multiple entities in a single strategy is even better than before
- In 2024 we also launched a new product ‘MPS’ for mass bespoke model portfolio management. We understood that the challenges that model portfolio managers face in managing multiple model portfolios on multiple platforms is similar to the problem that our CPS product solves in managing multiple client portfolios. MPS is all about helping the increasing number of model portfolio managers be able to improve productivity and operational risk management when managing multiple model portfolios across multiple platforms. The product has features such as loading up platform defined investment lists to check against, the ability to do ‘hierarchical’ model portfolio construction with a high degree of bespoke overlays and platform compliance to support highly efficient, automated model portfolio construction.
- In 2024 we started seeing increased scrutiny about the regulation of the use of model portfolios in investment products and services addressing key observations like ‘why does the same model portfolio perform differently on different platforms ?’ We expect, alongside AI regulation, to increase in 2025 with increased disclosures and ability for consumers and their advisers to compare and contrast model portfolio based products and services.
- In 2024 we also increased our adoption of AI technologies within Financial Simplicity experimenting with voice command driven software and generative AI driven portfolio review reports in our products and enhancing software development process quality.
- Reflecting of where the industry is at, and the pace of technological change, it is clear that firms who do not step up the level of systemisation that technologies like Financial Simplicity can bring will be left behind, either through a service level that their clients are seeking more from, productivity levels that are uncompetitive or unacceptable business and compliance risks
- In 2024 we also ramped out our testing capabilities to massively test and audit our personalised portfolio management and control algorithmic models. With many billions of permutations this is not a straightforward task, however something we have developed a core capability in and are in the spirit of industry development planning to make this available also to 3rd parties to test and assure their rebalancing engines also.
- In 2024 we continued our partnership with Microsoft on a number of levels including proprietary access to the Open AI API suites, making use of Azure for hosting globally and continuing with their enhanced software development environments.
We expect all these themes to continue in 2025, read our insights here.
