1.
Winning the Battle for the Wealthy Investor<br />Robert Waitman, Director<br />Cisco IBSG Financial Services<br />1<br />

2.
Cisco Wealth Management Survey<br />Investors lack confidence in the markets and they have spread their assets across many firms and advisors.<br />The Under-50 investor represents a huge opportunity for firms….significant assets, very involved clients, but willing to leave.<br />Technology (which they already use in their daily lives) is one of the differentiators….with $18B of revenue at stake, the time to act is now. <br />2<br />

3.
Survey Findings: Post-Crisis Attitudes and Confidence Levels<br />1<br />3<br />

4.
4<br />Many Now Believe the Playing Field Is Not Level…<br />The financial markets are a level playing field where investors like me have a fair chance to succeed. <br />Sample Size = 1,000<br />Source: Cisco IBSG Economics Practice, November 2010<br />

5.
…And 50% Believe Retirement Will Be Delayed<br />Think about the effects of the recent global economic crisis on the performance of your investments. Will the crisis cause you to delay your retirement date? <br />50%<br />Sample Size = 555<br />Source: Cisco IBSG Economics Practice, November 2010<br />

6.
80% Have Assets Spread Across More Than One Firm…<br />With how many different financial services firms do you have invested assets? <br />80%<br />Sample Size = 1,000<br />Source: Cisco IBSG Economics Practice, November 2010<br />

7.
30% Have No Financial Advisor<br />Do you have a financial advisor to help you make investment decisions? <br />Sample Size = 1,000<br />Source: Cisco IBSG Economics Practice, November 2010<br />

8.
8<br />…Because They Feel Fees Are Too High While Returns and Trust Are Too Low<br />Why do you not have a financial advisor? (Top 5)<br />Sample Size = 295<br />Source: Cisco IBSG Economics Practice, November 2010<br />

9.
Survey Findings: Under-50 Investors—Risks and Opportunities<br />9<br />2<br />

10.
Overall Assets by Age: U.S.<br />10<br />As a Whole, Under-50 Investors Hold 28% of U.S. Assets<br />Sources: U.S. Consumer Statistics, 2007; Cisco IBSG, November 2010<br />

11.
Percent who expect significant increase in investable assets through gift or inheritance in next 10 Years, by age and assets<br />11<br />Wealth Transfer Will Make Under-50 Investors Even Wealthier<br />Sample Size = 1,000<br />Source: Cisco IBSG Economics Practice, November 2010<br />

12.
12<br />Under-50 Investors Spend More Time Managing Their Investments…<br />Percent who spend 8+ hours per month managing investments (By age)<br />Sample Size = 1,000<br />Source: Cisco IBSG Economics Practice, November 2010<br />

13.
13<br />…And Demand Significant Time and Attention from Their Financial Advisors<br />Percent who interact daily or weekly with financial advisor to discuss investments (By age)<br />Sample Size = 705<br />Source: Cisco IBSG Economics Practice, November 2010<br />

14.
14<br />Even So, More Under-50 Investors Switched Advisors During the Crisis<br />Age Distribution of Wealthy Investors who Switched Financial Advisors<br />Sample Size = 705<br />Source: Cisco IBSG Economics Practice, November 2010<br />

15.
15<br />Under-50 Investors Are Very Interested In and Comfortable with Technology…<br />Technology attitudes and adoption level (By age)<br />86%<br />76%<br />Early<br />Majority<br />49%<br />32%<br />Early <br />Adopter<br />Sample Size = 1,000<br />Source: Cisco IBSG Economics Practice, November 2010<br />

16.
16<br />…As Shown by Tablet PC Adoption<br />Percent of respondents who own a tablet PC (By age)<br />Sample Size = 1,000<br />Source: Cisco IBSG Economics Practice, November 2010<br />

17.
17<br />Under-50’s Interested in Using Various Technologies to Interact with Advisors<br />Source: Cisco IBSG Economics Practice, November 2010<br />

18.
Survey Findings: Testing Scenarios<br />18<br />3<br />

19.
Scenario 1: Service to Provide Access to Firm and Other Experts <br />Receive access to multiple experts with specific expertise such as accountants and lawyers<br />Service coordinated by primary financial advisor<br />Meetings take place using high-definition video available in financial advisor’s office<br />Source: Cisco IBSG, November 2010<br />

20.
20<br />Business Context: Under-50 Investors Consult Several Professionals…<br />Not including your financial advisor, which of the following professionals do you consult about matters related to your investments?<br />Sample Size = 705<br />Source: Cisco IBSG Economics Practice, November 2010<br />

21.
21<br />…Are Interested in Using High-Definition Video…<br />Percent “interested” and “very interested” in using high-definition video in financial advisor’s office to meet with multiple experts <br />63%<br />Very <br />Interested<br />30%<br />21%<br />Interested<br />Sample Size = 1,000<br />Source: Cisco IBSG Economics Practice, November 2010<br />

22.
22<br />…And Are Willing to Move Investments to Receive Service<br />Percent who would move investments to access high-definition video from advisor’s office to meet with multiple experts <br />Sample Size = 1,000<br />Source: Cisco IBSG Economics Practice, November 2010<br />

23.
23<br />…And Are Willing to Move Investments to Receive Service<br />Percent who would move investments to access high-definition video from advisor’s office to meet with multiple experts <br />$18.6 B (Under-50s)<br />$28.6 B overall<br />Sample Size = 1,000<br />Source: Cisco IBSG Economics Practice, November 2010<br />

24.
Scenario 2: Service to Give Access to Online Investor Community<br />Investors given access to an online investor community (social network) to discuss strategies, ideas, stock picks with other investors<br />Investors could follow trades of other investors, chat online, etc. <br />Source: Cisco IBSG Economics Practice, November 2010<br />

25.
25<br />…And Are Open to Joining Investor Communities<br />Percent “interested” and “very interested” in investor community (social network)<br />66%<br />Very <br />Interested<br />23%<br />14%<br />Interested<br />Sample Size = 1,000<br />Source: Cisco IBSG Economics Practice, November 2010<br />

26.
26<br />Business Context: Under-50 Investors Using Social Networks, Blogs<br />Technology usage for managing and discussing investments (By age)<br />Sample Size = 1,000<br />Source: Cisco IBSG Economics Practice, November 2010<br />

27.
A Segmented Approach to Next Generation Wealth Management<br />High-Touch<br />Ultra-High- <br />Net-Worth Under-50s<br />> $ 30 M<br />Capabilities To Offer<br />In-person, coordinated virtual<br /><ul><li>Customized services (e.g., Virtual Family Office)</li></ul>High-Net-Worth & Affluent Under-50s<br />> $3 M<br />Frequent in-person, blended with virtual<br /><ul><li>HD video meetings with financial experts and/or family members

28.
Virtual mtgs., video messages from advisor</li></ul>Mass- <br />Affluent Under-50s<br />$0.5- $1 M<br />Primarily virtual, blended with in-person<br /><ul><li>Time-efficient FA interactions

29.
Access to FA via technology endpoints </li></ul>“Adviser-less” Investors<br />< $0.5M<br /><ul><li>Rich online self-service with on-demand FA access

30.
Investor communities</li></ul>Orchestrated self-service<br />Self-Service<br />Source: Cisco IBSG, 2010<br />

31.
Leading Use Cases to Get Started<br />Internal teaming / mentoring / specialist involvement<br />Bringing firm expertise to client and prospects more quickly and more often<br />Involving experts to close deals more quickly<br />“Virtual” offsite for client VIPs (build loyalty)<br />Staying well connected to client despite their location (reduce attrition)<br />Connecting to next generation / Holding family financial meeting<br />Establishing firm as a leader (to clients, employees)<br />Source: Cisco IBSG, 2011<br />

32.
In Closing....<br />Wealth Management industry on the brink of change as clients – especially those under 50 – are not satisfied with existing choices<br />New ways of interacting, especially high quality video, seen as a differentiator<br />With $18 B of revenue at risk, firms now piloting and deploying these capabilities<br />Source: Cisco IBSG, 2011<br />

33.
For more information on this research and the Cisco IBSG Financial Services Practice, visit http://www.cisco.com/go/ibsg/financialservices<br />