2009
FALL FOCUS
INVESTMENT CONFERENCE
Technology Trends in Wealth Management
Subir Chatterjee
Ramsey El-Fakir
CEO, Fi-Tek
CIO, Fi-Tek
© 2009 Northern Trust Corporation
northerntrust.com
Wealth Management Business Drivers
Technology trends are primarily being driven
by several key business drivers.

Continued Asset Accumulation by Baby Boomers
 Continued
aging of baby boomers
 They will hold a significant portion of personal trust assets
 Large growth expected in High Net Worth households

Increased Regulation and Compliance
 Compliance
will continue to be a key business priority
 KYC, AML, pre and post trade compliance Sarbanes-Oxley
 This will continue to increase in light of impending regulations

Selling Clients Multiple Products
model has been fragmented by products – investments,
brokerage, banking, credit, insurance, trust, retirement
 The challenge is how to bring the client under one roof
with a single RM supported by Product Specialists
 Cross sell
 WM

Open Architecture Adoption for Products
 Need
for integrating more third party independent products
vis-à-vis in-house ones
 Integration challenges
 Potential regulatory scrutiny in light of what happened in 2008
2
2009 Fall FOCUS Investment Conference
Wealth Management Business Drivers

Customer Centricity
 Most
wealth management firms would like to be “trusted advisor”
to their clients
 Especially transaction providers like B/D want to get into “advice”
to increase asset stickiness
 FP, advisory, data integration tools

Rise of the Mass Affluent
 Defined
by clients with assets between 500K to 2 MM
 Under-serviced by WM
 Need better tools for economic servicing of clients – have to
lower unit cost of service delivery

Increased Customer Sophistication
 Baby
boomers will be challenging clients
 A lot of do-it-yourselfers in the group will demand sophisticated
tools for research, analysis and reporting

Competitive Business Environment
firms of all sizes – small-medium-large are getting ready
to mount an assault on “acquiring, keeping and increasing the
wallet” of their clients
 Technology will be a key differentiator
 WM
3
2009 Fall FOCUS Investment Conference
Wealth Management Technology Trends
Technology plays a key role in addressing these business challenges.

Customer Data Integrations
 Firms
find it challenging to have a common platform for CRM to integrate all client info
 ML has gone to SalesForce.com goes to show the length to which they will go to accomplish this
 Many are struggling with 2-3 platforms internally

Integrated or Seamless Compliance Tools
 To
meet with regulatory issues many have brought in KYC, anti-money laundering
systems at a firm-wide level
 Extremely important to have automated Reg-9 reviews, investment reviews
 Pre and post trade compliance to reduce risk and automate process

Financial Planning and WM analytics
Asset allocation and modeling
 Validation of third party models or internal models in different market conditions
 Tactical Financial Planning – goal based approach or return based approach
 Trust Life Expectancy analysis
 What-if analysis
 Proposal generation


Client Reporting
Consolidated reports with drill down capabilities
 Performance reporting with trends and benchmarking
 Multiple targets for data – client advisors, FA’s, clients and their contacts
 Electronic and manual delivery channels

4
2009 Fall FOCUS Investment Conference
Wealth Management Technology Trends

Account Aggregation
 Clients
are driving this – they want to see all their assets in a single report
 WM
firms want to increase their size of client’s wallet and would need
to see full data to be the trusted advisor
 Challenges

remain – reliability of third party data
Advisory Workstation Integrated Desktop
 This
is extremely critical for efficient management of information
and processes
 Reduce
risk (compliance alerts)
 Identify
opportunities (client gets new cash into the account)
 Enhanced

Data Risk Management
 We
live in the age of ID theft
 Huge
liability with secured client data
 Secured
5
client service delivery model
client communication tools like Tumbleweed
2009 Fall FOCUS Investment Conference
How Does Fi-Tek Address These Trends?
Fi-Tek and Northern Trust have developed an integrated solution for the trust
and investment management community addressing many of these trends
TrustPortal with Wealth Management
Integrated Desktop
Wealth Management Platform
Prospect
Management
Financial
Planning
Investment
Accounting Reviewer
Management
Account
Workflow
Contact
Mgmt
Institutions
Clients
Data Vendor
Asset
Allocation
Modeling
Enhanced
Performance
Electronic
Fixed Income
Equity
Brokers
Service
Providers
Reporting & Client
Adhoc
Web Based
Statements Reports Reporting Reports
OFAC Compliance
Auto Asset Setup
Third Party
Applications
Extraction
Production Database
Consolidation Database
Replication
6
2009 Fall FOCUS Investment Conference
Phase 1 – incorporate 3rd
party held assets to report or
query alongside of held
assets
Generic’
API
Assets Held
Elsewhere
Models
Third Party
Information
Integrated Total Solution

Brand new .NET Technology with scalable database

Integrated with Northern’s Custody and Global Processing Capabilities

Completely integrated straight thru solution to help you grow your business
Client Bank
7
2009 Fall FOCUS Investment Conference
Major Functionalities

Wealth Management Analytics and Financial Planning tools

Investment Management and Transaction Processing
Portfolio Management
 Trading
 Market execution
 Compliance – pre and post trade, rules driven set up


Accounting and Securities Processing
Full trust accounting with the P&I split
 Tax lot accounting
 Most robust accounting platform in the industry


Automated Account Review

Performance Measurement

Reporting
Internal operations, compliance and administration reports
 External – investors or client reports and statements online


8
Third Party Interfaces – for pricing, tax, compliance etc.
2009 Fall FOCUS Investment Conference
2009
FALL FOCUS
INVESTMENT CONFERENCE
Appendix
About Fi-Tek
Integrated Wealth Management Solution
© 2009 Northern Trust Corporation
northerntrust.com
About Fi-Tek

Provides industry leading business solutions for
wealth management

Started operations in 1998 by combining technology
with business knowledge

Run by senior managers from Fortune 500 financial
services companies

10
Expertise in our clients’ business and work to solve the
right problem!

Over 150 financial institutions with over $700 Bn dollars
in assets under servicing are using Fi-Tek software to
run their key business functions

Work with major financial institutions like Citigroup,
Morgan Stanley Smith Barney, JP Morgan Chase, Bank
of New York-Mellon, State Street, Northern Trust, and
some of the major hedge funds

Excellent financial health – with a strong balance sheet
and high D&B rating

Successfully competing with the majors – SunGard,
Metavante, Advent and SEI
2009 Fall FOCUS Investment Conference
Business Solutions Overview

TrustPortal Wealth Management Platform
 Trust
and investment management on a single,
web-based platform for trust banks and institutions

HedgeTek – Hedge Fund Partnership Allocation
 Industry-leading,
fully integrated book and tax
allocation platform for hedge funds, and other
securities partnerships requiring 704C allocations
11
2009 Fall FOCUS Investment Conference
Solution for Trust Banks

12
Fi-Tek and Northern Trust have developed a total solution for the
trust and investment management community – primarily geared
towards the trust banks

Northern Trust is a leader in Wealth Management and provides all
banking related services – such as custody, research, securities
lending and short term investments

Fi-Tek provides the state of the art TrustPortal platform to deliver a
suite of functionality for front, middle and back-office services
2009 Fall FOCUS Investment Conference
Portal Dashboard



Portal Dashboard

Efficient tool for everyday work with quick access to function
that are used on regular basis

Customized per user so they see the functions that they use the most

Look up Account / Contacts
Efficient manage Account upcoming events /
Ticker through Calendar Widgets

Create customized memo ticker for each Account on different
areas that need attention.

Get alerts on the Calendar

Release the tickler when you have done with them so they
cycle to the next period

Customize your news as RSS feed. Be actively alerted for
any market activity

Use our Map widget to locate the address for a onsite visit to client.
Pull up the contact and map widget will give you the destination plotted.
Get Alerts:

Work on Account exception than going through all Accounts

Alerts:
 Excess Cash
 Cash shortfall
 Out of variance alerts for Account
associated to Asset allocation Model
 Be informed if
Account has securities
not on your approved list.
13
2009 Fall FOCUS Investment Conference
Wealth Management Analytics

Full suite of wealth management analytics to help develop
asset allocation models based on customer risk profile and
provide tools to generate financial planning options
 Enable
portfolio managers to define investor needs through
a series of questions
 Set
risk tolerance, as well as goals and objectives
 Define
current conditions of investor
 Through
sophisticated analytics generate portfolio models to
meet investor needs based on current and future scenarios
 Provide
portfolio managers tools to match the simulated models
with the models currently used – adjusting the likelihood of
attaining goals
14
2009 Fall FOCUS Investment Conference
Illustration: Base Plan
Some goals are not met in over 25% of the projected futures.
Plan adjustments are needed for a better guarantee of success.
 May need to adjust goals to increase likelihood of success
15
2009 Fall FOCUS Investment Conference
Investment Widgets

Proactive Alerts on
dashboard helps
you manage
accounts efficiently

Can customize the
widgets for a user’s
workflow

Rearrange to suit
your needs

Most often used
and important
functions can be
displayed

Fi-Tek can create
custom widgets
16
2009 Fall FOCUS Investment Conference
Life of a Trade
Portfolio Manager:
Proposes Trades
Executes Trades
1
Broker confirms trade
Northern Auto affirms
Northern confirms Trades
Operations imports confirms
reconciles and settles
17
2009 Fall FOCUS Investment Conference
3
2
Portfolio Modeling
18
2009 Fall FOCUS Investment Conference

Proactive alerts on dashboard help you to manage
accounts that needs rebalancing

Create / import models and make Model of Models
to better organize

Associate accounts and set rebalance variables

Create rebalance exclusion for non-traded
securities in a position

Create cash exclusion to cover recurring obligation

Rebalance the account or invest cash to get the
market spread
Modeling and Rebalancing: Summary

Investment Management allows you to:
 Create
and Manage a
 Comprehensive Model (Mix of Equity /
Fixed Income / ETF / Cash / Real
Estate etc)
 Base Model (Like Equity or ETF /
Mutual Fund only Model)
 Consolidated Model (Model of Model)
to create Models reflecting the Bank /
Portfolio Manager Investment
objectives.
 Associate
Models with Account
 Rebalance
 Invest
 Get
Account or Model
/ Divest Cash as per the Model
Alerts on Portal page for Accounts
not in line with Model objective
19
2009 Fall FOCUS Investment Conference
Modeling: Creating Models

Creating Models:
 Name
a Model
 Create Model
hierarchy (Levels)
 Assign asset
allocation
 File Models by
Portfolio Manager
and / or Investment
Objective.
 Save Model

Manage Models
20
2009 Fall FOCUS Investment Conference
Modeling: Import Models

Importing Models:
 Name
a Model
 Define Model hierarchy (Levels)
 Import the Model from Spreadsheet
 File the Models as per PM and Investment Objective
 Save Model
21
2009 Fall FOCUS Investment Conference
Modeling: Associate Models to Accounts

Use Models to manage Investment
strategies

Associate multiple Accounts to a
given Model

Set Rebalance parameters:





Minimum trade Amount
Effective date
Rebalance strategy
Portion of Model to rebalance.
Easy to learn and use
22
2009 Fall FOCUS Investment Conference
Rebalancing: Summary

Investment Management allows
you to

Easily rebalance any selected
Accounts to an associated Model

See the proposed trades and fine
tune them

See the expected Gains /
Losses with estimated changes
to net Income.

See the effect of Rebalancing
to your cash position

Get what-if reports showing
impact on Position before
and after, trades per Account,
trades per Security or
Proposed Holdings report

Save the session or Block and
execute with one click
23
2009 Fall FOCUS Investment Conference
Trade Execution
24

Comprehensive Trade blotter that can be customized to show all Trades for the organization
or be restricted to the Accounts you are managing.

Allows you to create a trade advice and keep it on the blotter for Market to move for trade
execution.

Allows pre-trade blocking of like trades for better execution, reduce fees and charge

Allows post-trade blocking if your Broker supports

Control release of a trade (slice a trade) for thinly traded stock so you are not moving the market

Electronic execution of Common Stock / ETF to 450 Brokers of your choice.
2009 Fall FOCUS Investment Conference
Reporting
25

Feature rich reports help projecting account overview along with in-depth details

Can be run for today or can go back as-of any date in past.

Extensive equities and fixed income reporting to help answer client / users need

Can be output to PDF / EXCEL / RTF

Create a report packet and mix and match report to prepare for client presentation.

Create as many report packets and save the criteria for one touch packet generation for future
2009 Fall FOCUS Investment Conference
Trust Accounting
Comprehensive and integrated trust accounting with detailed
P&I split and tax lot accounting

Cash Management

Income Accounting

Amortization and Accretion

Accrual

Automated Fee Processing

Audit Trail

Operational Management

Common Funds

Full regulatory and
compliance reports

Production Scheduler
26
2009 Fall FOCUS Investment Conference
Statements – Options / Production Process
27

Configurable Statement Packages

Large Repository of Statement Report Formats

EB Statements, Market to Market Summary, Holdings, Transaction, Taxlots

Court Accounting, GASB Reporting, Chart Reports

Ability to attach notices and letters

Customized Cover pages per package with Logo

Customizable Schedules for Accounts and / or Recipients

Automated Through Night work or On Demand (both Ad-hoc and Production)

Delivery to Secure Web site, encrypted email or Printed Copy

Statement Formats: PDF, DOC, RDF
2009 Fall FOCUS Investment Conference
Compliance
28

Compliance Reporting such as Schedule RC-T, 13F Reporting, 13G Reporting

Audit Compliance using audit trail and RFM logs

Automated Account Reviews with customizable questions and workflow

Auto approval of Reviews for “No Breach” accounts.

Trust Committee, Administrative and Investment Reviews

Rich repository of Account Review Report formats
2009 Fall FOCUS Investment Conference
Client Internet Access Functionality
29

Graphical Representation of Account Portfolio and Holdings

Views: Transaction Overview, Pending Trades, Tax Lot Information

Statement upload facility

Supports multiple account and consolidated views

Accessible 24X7 via RSA Secure Risk Based Authentication

Ability to upload Adhoc documents

Data refreshed every night automatically thru night work

Ability to white-label site with Client Logo and Color Scheme
2009 Fall FOCUS Investment Conference
Performance Reporting
30

TrustPortal has integrated
performance reports and
statements.

The reports are available
in the Report Manager
for internal use or in the
Statement Package for
distribution to end clients

The reports can be set
up from the inception of
the account

Reports are expandable
to meet client needs
2009 Fall FOCUS Investment Conference
Automated Account Review
The TrustPortal offers a powerful and streamlined solution that enables
Trust Providers to create regulatory and ad-hoc reviews. It eliminates
the need to gather information and coordinate efforts from different
parties throughout your organization.

Web Based Account
Review
 Regulatory
& ad-hoc
reviews

Business Process
Integration

Review Team
Collaboration Tools

Email Notifications
31
2009 Fall FOCUS Investment Conference
Online Reporting
The TrustPortal provides clients secure web based access to their trust
account to view, sort, download, and print daily account activity and
access their monthly statements securely over the Internet.

Web Based Account Reporting

Five Detailed Reports
 Portfolio
 Holdings
 Transactions
 Taxlots
 Pending
Trades

Strong Authentication

Secure Electronic Statement

Delivery

Auto Secured Data Uploader
32
2009 Fall FOCUS Investment Conference
2009
FALL FOCUS
INVESTMENT CONFERENCE
Thank You.
Subir Chatterjee
Ramsey El-Fakir
CEO, Fi-Tek
CIO, Fi-Tek
© 2009 Northern Trust Corporation
northerntrust.com