When Kevin Russell, propositions head at SEI Wealth Platform, started his financial services career in 1985, the world was a very different place.
In his team back then at Standard Life, he had an office comprising of four desks, one ashtray, a big ledger book, a large cupboard and one phone between him and his colleagues. There was no computer and everything was done on memos.
Mr Russell said: “Automation was not really there. The challenge then, was even communicating with head office. There were around 12 different head office buildings in Edinburgh.
“As my career developed I got more involved in how can we change that, using technology in different shapes and sizes, so I got involved in helping set up our telephone advice business, developing our e-commerce business and, more latterly, the platform business.”
Times have changed and now he is dealing with an altogether different and constantly evolving challenge in the platform sector, driven by technological advancements.
That is not least from the Gafas: Google, Apple, Facebook and Amazon, which are disrupting the marketplace and have a very important asset in their armoury – the customer.
“The large digital players; all of these providers have community-based solutions,” Mr Russell said. “Some are moving into financial services, starting with lending and savings, and other simple products like general insurance, but they will move into wealth.
"So we are kidding ourselves if we think we are going to have that pot to ourselves for much longer. We need to decide if we partner, compete or see them as a client. It is important for us to keep an eye on who is moving closer to our market and how we should respond to that.”
Disruption from the tech giants is just one of many things on Mr Russell’s radar.
The SEI Wealth Platform develops technology that supports all the business processes associated with managing wealth business; from tax reporting to portfolio accounting and portfolio management. Its clients include financial advisers, wealth managers, institutional investors and investment managers.
According to Mr Russell, among the things keeping his clients awake at night are achieving growth, reducing cost bases and mitigating risks.
Those worries are nothing new in business, but they are becoming more prevalent in a market that is not vastly profitable and at the same time is facing heavy regulatory scrutiny and technological changes.
Mr Russell said: “The requirement to develop and maintain technology to meet the fast changing market demand around risk and compliance, the different business models; it is a complex thing, because you are bringing a whole bunch of things together.
“Cash flow modelling tools, CRM, custody, reporting. You are bringing it all onto one platform. It is a lot for firms to think about and include in their service proposition.”
The pressure has led to an increase in the number of firms looking to outsource their operations.
Mr Russell said: “Larger firms have tried to develop their own operations, but have now realised it is not sustainable any longer. The cost of Mifid II, the general data protection regulation (GDPR), the Second Payment Services Directive (PSD2) and maintaining the different technology and integration to deliver a seamless user experience is too costly.
“We are seeing a much bigger appetite than we saw a year ago to outsource.”
The UK private banking business increased assets under administration by £6.2bn, or 20 per cent, in the first half of this year; bringing the total to AUA to £37.9bn as of the end of June.
In the past year SEI has signed deals with robo-advice firms including Netwealth and Munnypot.
From Mr Russell’s previous work at Standard Life, he has brought a practical understanding to SEI of what wealth managers need.
There is a growing desire from advisers who want to get a complete overview of all their clients’ financial circumstances and portfolios, but the technology is not yet fully there.
As a result of these changing needs, going forward the focus at SEI will expand to look at financial wellbeing. In the UK, it has historically focused on investment and wealth.
“So why would we not think about how we would integrate solutions that address healthcare, life cover issues alongside your asset management and your investment needs?” Mr Russell said.
“We are kidding ourselves if we think it [regulation] will be less noisy than it is today. As a market we do not invest enough in the savings gap."
The current noise from regulation he refers to has seen the regulator launch reviews on the asset management and platform markets.
Mr Russell believes the reviews will bring about positive outcomes in a market that needs to focus more on how the client wants to be serviced than predominantly on the products. This is all why in the past year and going forward the buzz word at SEI is integration.
He said: “A lot of our development in the UK would have been developing the wealth platform. That’s now pretty mature. A lot of my focus in the last year has been how do we join that effectively with the tools our clients are using to deliver a more seamless process."
Ima Jackson-Obot is a features writer of Financial Adviser
Kevin Russell's career highlights
1985 – 2009: Various roles including group e-commerce development manager at Standard Life
2009 – 2011: Head of platform and e-business development at Standard Life
2011 – 2016: Co-founder and managing partner of Platform People consultancy firm
July 2016 – present: Proposition director at SEI Wealth Platform UK
