On the recent PBI conference in London, Ton Kentgens argued the case that developments such as compliance, digitization and robo advice should not be seen as burdens or threats. On the contrary, they provide opportunities to achieve better and more holistic financial planning. As Head Global Business Development for Private Client Solutions at Ortec Finance, Kentgens firmly adheres to client centric or goal-based MiFID concepts like Know Your Customer and suitability.

 

Ton Kentgens

Risk profiles that reflect long-term risks

“At its core, it comes down to the difference between the willingness and the ability to take risks”, he states. A risk profile based on the willingness of the client to take risks is not very accurate. Bankers generally create their client’s risk profile by asking questions that are not meant to deal with long-term risks at all, even though the goals of the client almost always lie further away in the future. “Knowing your customer” means providing financial advice that takes medium and long-term risk and return into account. MiFiD and other regulation tend to agree with that view.
"Kentgens wants to move away from peddling products, and truly build the advice around the clients’ goals."

Reliable forward-looking projections

When ambitions are sufficiently concrete, the next step is to find the optimal investment portfolio. Goal-based Financial Planning supports investors in determining an investment strategy that optimally contributes to the realization of investment goals, and that also aligns with the investment risk that the investor is comfortable with. Its strength lies in the combination of short-term and long-term insights. In the current advisory practice, one often selects a secure risk profile based on the short-term risk of an investment portfolio. The short-term risk is the volatility (or the fluctuation in value) of the investments over a one-year period. This means that investment decisions are made based on short-term developments, whereas the goals that must be realized often lie much further into the future.

Reliable forward-looking projections

Through advanced scenario analysis, Ortec Finance can offer reliable forward-looking projections that fit in real well with the need for monitoring, transparency, and digitization. Kentgens wants to move away from peddling products, and truly build the advice around the clients’ goals. Only then can the current gap between wealth managers and a whole new generation of clients be bridged. Wealth advisors must ask themselves: “What can I take from the digital world that does not endanger, but instead enhance my advisory services?” For Kentgens, the future of private banking lies in an omnichannel environment, merging financial advice and digital devices in such a way that it becomes “truly a seamless experience between advisor and client”.

Kentgens spoke on the annual conference of Private Banker International, which was held on June 15 in London. The theme that day was “Exploring the Disruption of Wealth Management”. Various speakers from the industry focused on the evolving landscape of private banking, highlighting the rise of digitization and automation as particularly important issues.

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