In this edition...
- Synaptic Renaissance Eric Armstrong, Client Director, Synaptic
- Technology is enabling sustainability Richard Clode, Portfolio Manager, Janus Henderson Investors
- Why thinking thematically helps us secure tomorrow Jeremy Thomas, Head of Global Equities, Partner, Sarasin & Partners
- Pension switching. The pinnacle of research and the mainstay of financial advice Matthew Howe, Account Manager, Synaptic
- How climate change can impact return expectations and what this means for multi-asset investors Alex Funk, Chief Investment Officer, Schroder Investment Solutions
- The Climate Challenge and the role investors can play Randeep Somel, Fund Manager, M&G Investments
- Emerging opportunities in emerging markets. A diversified emerging market strategy may offer attractive return potential Goldman Sachs,
- Reinvest is best: building a brighter future Mark Denham, Head of European Equities, Fund Manager, Carmignac
- How UK investors can protect their savings from inflation Talib Sheikh, Head of Strategy, Multi-Asset, Jupiter Asset Management
- Synaptic Pathways can take your firm’s asset allocation a step further than Nobel prize winning Modern Portfolio Theory (1) Ellen Ashcroft, Research and Implementation Manager, Synaptic
- What’s on the horizon for ESG regulation? Prema Sohun, Technical Marketing Manager, VitalityInvest
- Dividends & alternatives for the equity income seeking investor Katie Poulson, Marketing Manager, RSMR
- How women and younger investors think differently about investing Natalie Holt, content editor, the lang cat
- Developing your investment proposition - part 3 David A Norman, CEO, TCF Investment
Synaptic is enjoying a renaissance. A flourishing of new ideas, purpose and relevance. Visitors to the new website will see new branding and new content, but most importantly, the epic transformation in the design and build of an entirely new software proposition to support the advice process.
What is Synaptic offering that is so different?
"Synaptic Pathways reduces the complex research tasks demanded by MiFID II from hours to minutes, and offers a unique opportunity for firms to gain efficiencies and to grow, boosting profitability that previous technological innovation has failed to deliver."
Institutional strength research
The foundation to success in retail investment is asset allocation. Academic research shows that asset allocation drives returns (as opposed to stock picking), and asset allocation delivers the diversification that ensures a portfolio will perform in different market conditions. Until the advent of platforms and adviser charging, asset allocation was an institutional activity that sat with asset managers and providers of yore. Now firms can access the industry’s leading institutional risk and return framework from Moody’s Analytics via Synaptic Pathways. Establishing an effective and successful investment strategy must be at the heart of any financial planning endeavour, and regulation demands the quantification and management of risk, loss and reward. Seeking ‘Informed consent’ is a powerful practical approach, as well as a regulatory requirement, when done correctly using Moody’s Analytics risk model and Synaptic research.
This is a defining, industry megatrend, seeking to link the ‘manufacture’ of investment solutions to their ‘distribution’. Private equity is providing capital to consolidators to assimilate and restructure firms into larger parent organisations. Synaptic is one of the few propositions that can claim to offer advisory software solutions to support scaling organisations. The lack of integration of advisory tools that has typified the experience of advisers for years has meant that re-keying, sourcing data from multiple sources and accessing multiple tools has been the norm. Synaptic is offering a way out of these historical constraints to support ambitious advisory firms.
Research-led digital transformation
Generally speaking, firms need to improve on their use of research and technology. Not doing so is to compromise quality and accuracy in an organisation, but also creates an artificial ceiling in the AUM that a single administrator, however skilful, can oversee, as presented in an influential research report from Origo and the Lang Cat1. This is a massive constraint in terms of capacity and profitability.
Synaptic Pathways reduces the complex research tasks demanded by MiFID II from hours to minutes, and offers a unique opportunity for firms to gain efficiencies and to grow, boosting profitability that previous technological innovation has failed to deliver. There is no point in doubling down on technology that has failed. It is time to try something new. The benefits delivered by CRM-based integrations that focus on client data (rather than research data) have long since dried up. A further bonus for subscribers to Synaptic Pathways is the automatic acquisition of one of the greatest contemporary IT assets available - a Salesforce™ license. Synaptic Pathways was designed and built to operate as part of the Salesforce eco-system, meaning that you are buying the proven Salesforce security, usability, data handling and scorching overall performance that has made Salesforce the world’s number 1 CRM technology. Synaptic Renaissance Eric Armstrong Client Director Synaptic
Heavy lifting for the difficult tasks
Much of what passes for research these days falls well short. There are a lot of moving parts in putting together a recommendation, and there are many corners to be cut if it is not done properly. A personal recommendation from an adviser is a regulatory construct for which the adviser will be held liable in perpetuity. There is no longstop on advice! For the adviser to meet the twin goals of ‘best advice’ and compliance cover, a well audited, joined-up research process is critical, from risk profiling to pension switching. The key elements, which good research will provide, include reliable forecasts of investment outcomes that can be used to align with the objectives agreed between the client and the adviser, and secondly, forensic disclosure of costs and charges. The latter can only work on a probability basis – which is why Synaptic integrates with the industry-leading Moody’s Analytics stochastic engine, a marvel of mathematical modelling and real-world economic expertise.
Regulation requires proof of Suitability in advice, not only pre-transaction (or ex-ante using MiFID II parlance), but also in review (ex-post). Pre-MiFID II, firms were geared to provide a ‘service’ in review, not on-going proof of suitability. The only way to meet this additional burden is to ensure that the research and proof of suitability required in the review process can be conducted automatically. Synaptic is currently the only research solution that can do this on a whole-of-market basis. In the event of switching, Synaptic provides full analysis and calculations to disclose the consequences of staying invested or switching. Any investment proposal, on any platform, product or portfolio can be fully illustrated using Synaptic Pathways.
Today’s compliance challenges
There are two new regulatory initiatives looming over firms looking to reinforce the recent regulatory framework that MiFID II has created. The first is the introduction of the new FCA initiative, the ‘Customer duty’ framework, which demands ‘behaviours’ from advisers and threatens new penalties. The second is the new initiative around ‘Value-for-money’ or ‘VFM’, workplace and nonworkplace, where the FCA is seeking to further reinforce its duty of care to savers and investors. Protecting a firm’s profitability and keeping ahead of regulation requires more robust research than ever. Synaptic is the only end-to-end solution that was designed and built after MiFID II, capable of supporting a firm’s Central Investment and Retirement Propositions consistent with the PROD framework, proving ‘duty of care’ and ‘VFM’.
At present, no other integrated solution exists that can deliver the important research that firms need in a whole-of-market manner, free from constraints of vested interests or restriction. This is an important factor as the industry consolidates and the vertical integration trend continues. Even firms that enjoy outstanding platform and custody arrangements in-house will have to conduct research (switching / legacy investments) using data that must be sourced externally and presented on a like-for like basis. Synaptic bridges that gap. In COBS there is already special concern for conflicts of interests and decisions made on custody that may be compromised by preference to employ in-house solutions or preferred providers. Synaptic enables you to prove that recommendations are always in the interests of clients.
The new Synaptic Pathways research and due diligence suite is now available. Get in touch to arrange a free demo or trial at your convenience. Visit www.synaptic.co.uk/trial or call us on 0800 783 4477.
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