After digital disruptors demonstrated the viability of automated advice, traditional firms are in the middle of responding to this threat and opportunity. MyVest’s CEO Anton Honikman will interview Aite Group’s Alois Pirker about his research into how incumbents are developing their digital wealth offerings. Alois will share how we are moving from the 2nd to the 3rd stage of robo-advice adoption, and his recommendations for how you can prepare for the future through making better use of segmentation, data, and differentiated advice.

1. Presented at:
July 12, 2017
ROBO-ADVICE:
REVENGE OF THE
INCUMBENTS

2. Aite (pronounced “eye-tay”) Group is an
independent research and advisory firm focused on
business, technology, and regulatory issues and their
impact on the financial services industry.
A fintech pioneer headquartered in the heart of San
Francisco, MyVest combines best practices in wealth
management with best-in-class technology. Our
cloud-based platform enables holistic, client-centric
wealth management across the enterprise in a
single, unified system.
Alois Pirker
Research Director,
Wealth Management
Anton Honikman
CEO
© 2017 MyVest Corporation. All Rights Reserved.

3. Type Definition
% of
Population
Wirehouse
Merrill Lynch, UBS, Wells Fargo Advisors,
Morgan Stanley
8%
Independent RIA
Mostly small firms but also have RIA
groups working within larger broker-
dealer firms
16%
FA with other
self-clearing firm
Large / regional players: e.g.,
Ameriprise, Edward Jones, Raymond
James, LPL, RBC
13%
FA with online
broker
Schwab, Fidelity, TD Ameritrade on the
retail side (fewer than 2,000 advisors)
10%
FA with
insurance BD
e.g. AXA, Northwestern (fewer than 10K
advisors, some with more than 5K)
15%
FA with
independent BD
e.g. Commonwealth Financial, ING
(fewer than 5,000 advisors)
14%
FA with bank BD
e.g. PNC, M&T Bank (fewer than 1,000
advisors)
8%
FA with private
bank / bank trust
e.g. Northern Trust, US Trust, Bessemer
Trust
16%
2 Annual Survey of 400 Advisors1 Qualitative Interviews
In-depth interviews with a variety of
industry participants:
• Executives at financial institutions
• Financial advisors
• Executives at fintech firms
• Start-up firms and disruptors
“We take a topic and look at it
from both sides, and that gives
us a sense of what's happening
in the market.”
- Alois Pirker, Aite Group
Aite Group Methodology
© 2017 MyVest Corporation. All Rights Reserved.

4. How Did We Get Here?
The Evolution of Robo-Advice

5. Traditional
wealth
management is
under
pressure
Profitability
Competition
Demographic shifts
Regulatory uncertainty
Legacy technology & business model

6. 1996 Today
OverallAdoption
B2B for
Enterprise 1.0
Quick Wins
Simplicity, UX
B2B for
Enterprise 2.0
Hybrid Human+Tech
Multi-Segment
+
+
Pioneers
Early Niches
B2C 1.0
Retail Disrupters
B2B for
Independent
Advisors
Disrupt RIA Vendors
B2C Pivots to B2B
B2C 2.0
Retail Response
Evolution: From robo-advice to digital wealth
© 2017 MyVest Corporation. All Rights Reserved.

7. 1996 Today
OverallAdoption
B2B for
Enterprise 1.0
Quick Wins
Simplicity, UX
B2B for
Enterprise 2.0
Hybrid Human+Tech
Multi-Segment
+
+
Pioneers
Early Niches
B2C 1.0
Retail Disrupters
B2B for
Independent
Advisors
Disrupt RIA Vendors
B2C Pivots to B2B
B2C 2.0
Retail Response
Evolution: From robo-advice to digital wealth
© 2017 MyVest Corporation. All Rights Reserved.
“B2B for Enterprise 1.0 is a quick win;
B2B for Enterprise 2.0 is about strategic
business transformation.”
- Alois Pirker, Aite Group

8. $70
$141
$204
$16
$25
$43
$171
2016 2017E 2018E
Estimated Growth of Digital Advisor Solutions
($ in Billions)
Retail assets
acquired by
traditional
incumbents
Retail assets
acquired by start-
up digital advisors
directly
Vanguard,
Schwab, Fidelity,
E*Trade, TD
Ameritrade
$400B
$90B
Market sizing & growth: Incumbents pulling away
© 2017 MyVest Corporation. All Rights Reserved.

9. $70
$141
$204
$16
$25
$43
$171
2016 2017E 2018E
Estimated Growth of Digital Advisor Solutions
($ in Billions)
Retail assets
acquired by
traditional
incumbents
Retail assets
acquired by start-
up digital advisors
directly
Vanguard,
Schwab, Fidelity,
E*Trade, TD
Ameritrade
$400B
$90B
Market sizing & growth: Incumbents pulling away
© 2017 MyVest Corporation. All Rights Reserved.
“Banks and insurance firms will
challenge this $171 billion growth
segment.”
- Anton Honikman, MyVest

10. 3%
16%
31%
23%
13%
15%
5%
15%
13%
32%
20%
15%
Practice has
made the
decision to
launch a digital
advisor service
Very interested Interested Somewhat
interested
Not interested We have not
discussed
this/thought
about this
Q2 2017 Q3 2015
50%
interested or
ready to
adopt
(up from 33%)
Source: Aite Group survey of 369 financial advisors, Q2 2017 and 403 financial advisors, Q3 2015.
Q: How interested is your practice in leveraging
new digital advisor technology over the next few years?
Advisor interest in new technology
© 2017 MyVest Corporation. All Rights Reserved.

11. 3%
16%
31%
23%
13%
15%
5%
15%
13%
32%
20%
15%
Practice has
made the
decision to
launch a digital
advisor service
Very interested Interested Somewhat
interested
Not interested We have not
discussed
this/thought
about this
Q2 2017 Q3 2015
50%
interested or
ready to
adopt
(up from 33%)
Source: Aite Group survey of 369 financial advisors, Q2 2017 and 403 financial advisors, Q3 2015.
Q: How interested is your practice in leveraging
new digital advisor technology over the next few years?
Advisor interest in new technology
© 2017 MyVest Corporation. All Rights Reserved.
“The sands are shifting.
The fastest growing advisors see the
opportunity in new technology.”
- Alois Pirker, Aite Group

12. Response
% of
Population
Improve the clients' digital experience 46%
Acquire a new segment of clients 40%
Automate processes
(onboarding, portfolio management)
39%
Offer clients more service options
to best fit their needs and preferences
39%
Serve some of our existing clients
more cost-effectively
34%
Meet the needs of any client/prospect...
who prefers passive/low-cost portfolio
management
32%
The “What”
Q: What are (or would be) the practice’s goals
for such a platform?
Response
% of
Population
Generation X
(35- to 50-year-olds)
49%
Millennials
(under 35 years old)
48%
High-potential clients
(e.g., early career professionals)
47%
Children of existing clients 45%
Friends of existing clients who do not meet
the minimum balance
27%
Parents or other relatives of existing clients 26%
Any client who does not meet our practice’s
minimum balance
13%
The “Who”
Q: What types of clients would your practice
seek to acquire or service through a digital
advisor platform?
Source: Aite Group survey of 369 financial advisors, Q2 2017.
Who will they target & what are their goals?
© 2017 MyVest Corporation. All Rights Reserved.

13. Response
% of
Population
Improve the clients' digital experience 46%
Acquire a new segment of clients 40%
Automate processes
(onboarding, portfolio management)
39%
Offer clients more service options
to best fit their needs and preferences
39%
Serve some of our existing clients
more cost-effectively
34%
Meet the needs of any client/prospect...
who prefers passive/low-cost portfolio
management
32%
The “What”
Q: What are (or would be) the practice’s goals
for such a platform?
Response
% of
Population
Generation X
(35- to 50-year-olds)
49%
Millennials
(under 35 years old)
48%
High-potential clients
(e.g., early career professionals)
47%
Children of existing clients 45%
Friends of existing clients who do not meet
the minimum balance
27%
Parents or other relatives of existing clients 26%
Any client who does not meet our practice’s
minimum balance
13%
The “Who”
Q: What types of clients would your practice
seek to acquire or service through a digital
advisor platform?
Source: Aite Group survey of 369 financial advisors, Q2 2017.
Who will they target & what are their goals?
© 2017 MyVest Corporation. All Rights Reserved.
“As you can see, these digital advice
platforms service nearly all client
segments and firm goals.”
- Alois Pirker, Aite Group

14. Where Are We Going?
The Revenge of the Incumbents

15. Brand
Customer base
Multiple service channels
Existing BD or bank
Client data
Product diversity
Research
Balance sheet
Incumbents’ unique advantages

16. But
incumbents
have their
own unique
challenges
Inertia
Lack of digital vision
Fear of cannibalization
Siloed legacy technology
Non-agile development culture

17. Fintech
partnerships
can help
bridge the
gap
© 2017 MyVest Corporation. All Rights Reserved.

18. Fintech
partnerships
can help
bridge the
gap
© 2017 MyVest Corporation. All Rights Reserved.
“Incumbents will benefit most when they
embrace fintech’s culture of change.”
- Anton Honikman, MyVest

19. Serve multiple segments
Value-added services
Robust client data layer
Incumbents’ new opportunities in digital wealth
© 2017 MyVest Corporation. All Rights Reserved.

20. Serve multiple segments
Value-added services
Robust client data layer
Incumbents’ new opportunities in digital wealth
© 2017 MyVest Corporation. All Rights Reserved.
“There’s so much opportunity in the
amount of data firms have.
Start with the data and use it to
hyper-personalize the experience.”
- Anton Honikman, MyVest

21. 1. Invest in great UI/UX (table stakes)
2. Leverage your strengths
3. Seek out smart fintech partnerships
4. Move from simple segmentation to
hyper-personalization
Incumbent
recipe for
success

22. 1. Invest in great UI/UX (table stakes)
2. Leverage your strengths
3. Seek out smart fintech partnerships
4. Move from simple segmentation to
hyper-personalization
Incumbent
recipe for
success
“Incumbents, now is your time.”
- Anton Honikman, MyVest

23. Learn
more
aitegroup.com
myvest.com
© 2017 MyVest Corporation. All Rights Reserved.