Converging and rapidly evolving industry trends are creating a new wealth management environment demanding Wealth Managers redefine supervisory governance to best support the firm’s growth strategies while balancing strong risk management. In this new Accenture Finance & Risk presentation we explore the evolving wealth management trends and challenges and outline four key business supervision design questions to support sustainable, long-term growth.

1. DESIGNING ENHANCED
SUPERVISION FOR
EVOLVING WEALTH
MANAGEMENT ECOSYSTEM
DISCUSSION DECK
FEBRUARY 2018

2. Copyright © 2018 Accenture. All rights reserved. 2
ADAPTING TO NEW WEALTH INDUSTRY TRENDS & CHALLENGES
Converging and rapidly changing industry trends are creating a new wealth management landscape demanding Wealth Managers
reevaluate existing business supervision models and risk frameworks to more effectively manage risk and support growth.
Firms should realign their business supervision model to adapt to growing industry challenges and implement a governance
framework that best supports the firm’s growth strategies while balancing revenue interests and risk management
NEW
COMMUNICATIONS
CHALLENGES
• Firms to effectively monitor and
manage data disclosures in
order to meet compliance
requirements
• New communications channels
(i.e. social, mobile) adding
complexity for managing
sensitive data protection
• Since the global financial crisis,
over $300B risk and conduct
fines2 have been levied
• Penalties and brand damage
arising from Financial Advisor
misconduct demands
increased monitoring
activities
SUITABILITY RISKS
& REGULATIONS
SHIFTING CLIENT
DEMOGRAPHICS
• Over the next 30 years, roughly
one third of assets will
change hands1 from Seniors
and Boomers to their spouses
and the next generation
• An aging client population
presents risk related to serving
seniors / vulnerable investors
CHANGING CLIENT
EXPECTATIONS
• Clients expect a holistic and
personalized wealth offering
with flexible pricing options
• New complex products and
offerings require new risk
frameworks and specialized
training
1. “The “Greater” Wealth Transfer – Capitalizing on the Intergenerational Shift in Wealth. Accenture 2018
2. “Banks’ post-crisis legal costs hit $300bn,” Financial Times, June 7, 2015

3. Copyright © 2018 Accenture. All rights reserved. 3
BUSINESS SUPERVISION MODEL DESIGN PRINCIPLES
To meet industry challenges, wealth managers should enhance their regulatory supervision models and realign supervisory
responsibilities in order to increase consistency and effectiveness of supervision, protect reputation, and support long-term growth.
Key Supervision Model Design Questions
Does the Business have a Holistic Risk View
and understanding of underlying risk inter-
dependencies?
Increasing complexity in the risk and regulatory
ecosystem is heightening the need to develop a holistic
view of risk
Siloed views of risk impede firm’s ability to govern risk across
the enterprise, and allow gaps in coverage to remain
undetected
Effective supervisory arrangements, practices
and capabilities are required for consistent supervision
at scale
Many firms are moving towards centralized supervision and
utilizing managed services to unlock efficiencies and build
specialized workforce capabilities
Are Governance Structure, Roles &
Responsibilities clearly defined and effective at
support ing sustainable growth?
Do resources have the Skills and Capabilities
to meet new business supervisory requirements?
Business supervision demands a fundamentally different
workforce with more specialized training in analytics
Advances in technology, including workforce digitalization
and process automation, lead to a focus on complex
decision making and data analysis
Firms are investing in data, analytics and technology to
empower supervisors and deliver the future state model
Leading firms applying analytics and Artificial Intelligence
(AI)-driven solutions to permit forward-looking surveillance
that is self-learning and self-improving
Are the Technology Capabilities sufficient to
surveil the supervisory model and allow for scale?

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INTEGRATED & HOLISTIC APPROACH TO RISK MANAGEMENT
A changing regulatory and industry landscape is creating new challenges for wealth managers, confirming the need for a focused
business supervisory function to proactively manage risk and compliance holistically across the business.
Key Considerations
• Apply an integrated risk management
approach across various non-financial risk
exposures (i.e. Sales Practice, Operational Risk,
Fraud) to remove siloes and connect the dots to
allow supervisors to more readily identify
patterns and trends
• Increase collaboration and define responsibilities
between the business and second line of defense
partners for complete risk coverage and reduce
duplication of work
• Define a common risk and control taxonomy
structure to allow shared language across
various risk types and functions and alignment
around single understanding of risk and
ratings
• Document clear risk escalation paths and
empowered governance review committees to
review issues and outlined required remediation
plans
• Invest in data, reporting and analytics tools to
permit the business to build and test
hypotheses to uncover emerging issues and
root causes
Independent Financial
Advisors & Third-Party Brokers
Local Branches, Financial Advisors,
Relationship Managers
2nd Line Support Functions
Risk Compliance Fraud Financial Crime Data Security Vendor Mgt
Business
Continuity
Wealth Management Business
Relationship & Lead Management
Lead & Prospect ManagementMarketing & Campaign Management
Client Servicing
Client Onboarding Client Risk Profiling Client Servicing Client Reporting Client Alerts Mgt
Execution
Trade Processing Cash Management Breaks Mgt Settlements
Product
Product Design New Product Approval Product Marketing Product Mgt
Investing & Portfolio Management
Investment Strategy Portfolio & Risk Analytics Trade Order Management Trade Compliance
Manage Books & Records, Reporting & Administration
Portfolio Accounting Asset Servicing Reporting
Financial Mgt &
Administration
Vendor Management
Front/MiddleOfficeBackOffice
Target Wealth Management Risk Framework

5. Copyright © 2018 Accenture. All rights reserved. 5
REDEFINING SUPERVISORY GOVERNANCE
Many firms are assessing front office supervisory arrangements between the field and central office and realigning the current
supervision model to help reduce risks exposures as well as improve efficiencies and core supervisory capabilities.
Industry Operating Model Options
Implementation Considerations: When determining the implementation approach, other factors should be considered
A centralized function that acts as a starting
point for supervisory process management,
governance and field support. This model
provides advantages for complex and large
organizations, allowing for increased
resource specialization but requires strong
collaboration with second line of defense
partners for effectiveness.
Centralized Model
Other functional
areas
Central
Office
A
Central
Office
R C I
End-to-end supervisory activities are
facilitated by segregated groups within each
business or region. This allows more direct
interactions with Financial Advisors, Broker-
Dealers and clients. The challenges with this
model include conflicting governance
structures, duplication of effort and increased
spend risk, and difficulty in aggregating data.
Decentralized Model
Other functional
areas
Central
Off./ Field
A
Field
R C I
The Hybrid model has Supervisory Activities
performed in both a Centralized and
Decentralized model to allow specialization in
certain skills and maintain more direct
connection with the field.
Hybrid Model
Other functional
areas
Central
Off./ Field
A
Central
Off./ Field
R C I
A managed services approach to process
transformation allows for consistent, ongoing
process adjustments and improvement
throughout an organization. Managed
services models include third-party services,
hub-and-spoke, workforce creation and
partnership models.
Managed Services
Other functional
areas
Central
Office
A
Service
Provider
R C I
Local Considerations
Consider key local nuances and
potential risk exposures
Activity Relevance
Consider whether supervisory activities
are still relevant for future state
Non-Supervisory Activities
Additional activities currently performed
by supervisors to support branches
Branch Consolidation
Develop real estate strategy and identify
branch consolidation opportunities
Success Tracking / MIS
Implement KPI metrics and MIS to
monitor success tracking
Note: RACI = Responsible (R), Accountable (A), Consulted (C), Informed (I)

6. Copyright © 2018 Accenture. All rights reserved. 6
REQUIRED RISK MANAGEMENT SKILLS AND CAPABILITIES
Risk management demands a fundamentally different skillset from operational task processing and general compliance as complex
decision making / analysis and technology / data management often requires talent reskilling and recruiting new talent.
Continuous
Monitoring &
Investigations
Employee
Compliance
Focus and Proficiency
Communications
Business Acumen
Legal Skills
Analytics
Tech. Acumen
Perf. Monitoring
Control
Oversight
Risks &
Controls
Considerations for Required Skills for a 2020 Workforce:
Increased workforce digitalization and process automation
facilitates a transition of the risk and compliance role from
General Risk Managers to Deep Subject Matter Advisors
that focus on solving complex problems
Risk and compliance professionals will be able to refine
specialties (Product, Business, Regulation) through dedicated
career paths and provide more effective business oversight
and advisory support
Staff to be savvy in leveraging technology innovations for
which continuous training will be required
While new technology may help to alleviate skill shortages in
selected areas, investments will be needed to re-skill /
recruit new resources to best deliver on new advisory-
focused, data-driven roles

7. Copyright © 2018 Accenture. All rights reserved. 7
ENHANCING TECHNOLOGY TOOLS
Leading Wealth Managers’ Supervision / Surveillance functions are leveraging analytics and data mining tools to manage
compliance risk, make better business decisions with more insightful and meaningful data, more proactively monitor compliance
with various regulations and controls in effect and to drive efficiency.
Management Information
Reporting
Specialist Supervisor
In-process Controls
Expert Rules /
Machine Learning / AI
Advanced Analytics /
Data Visualization
Standard & Ad-hoc reports
Special supervisory control unit
Controls to stop & detect instances of
Non-compliance
Exception-based rules to identify
improper activities
Predictive analytics to predict future
non-compliance
Time
Maturity
Descriptive
Analytics
Maturity of Analytics Function
Take a leadership
position with investments
in AI, analytics, or
managed services
Connect compliance
infrastructure, skills and
capabilities across
business lines
Wait for others to make
compliance changes
before leap-frogging
ahead of them
Innovators Integrators Improvers

8. Multisource Alerts or KRIs Prioritization Protocol Issue Resolution Monitoring
Assign Actions & Monitor ResolutionsPrioritize issues
Reporting
Communicate
Copyright © 2018 Accenture. All rights reserved. 8
INTEGRATED SURVEILLANCE APPROACH
The industry is moving towards a more holistic surveillance approach to manage the dependencies between non-financial risks and
to promote better risk governance. An integrated surveillance approach with an end-to-end workflow to collect data, distinguish the
relevant cases / alerts to focus on, assign and monitor mitigating actions and provide dashboards / reports should be considered.
Collect data
8
Analytics Insights
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x Use predictive analytics to
identify correlations, root
causes between issues
Use Machine Learning to learn from
action resolved and false positives to:
• auto adapt models for better prediction
• suggest potential actions
Use advanced visualization
to identify patterns
Predict Issues Suggest Resolution Actions Identify Patters
Advisory Areas Compliance
E-Comms Surveillance Customer Complaints
Trade Surveillance Activity Volumes
Information Risk Processing Breaks
Aggregated Data
Repository
*Illustrative Data Sources
Communicate and
report on the various
data available issues,
risk, false positives,
resolutions
Identifies KRIs that are
above thresholds / limits
Identifies relevant alerts
!
Sorts compliance
findings by priority
Use risk
scorecards to
prioritize
Financial Crime Issues
Non-Disciplinary Issues
(systems, procedures, training, …)
Disciplinary Issues
(Investigation, revocation, etc..…)
Closed cases
(false positives)
Issues
Action
Plan
Action
PlanAction
Plan
Issues
Action
PlanAction
PlanAction
Plan
Issues
Action
Plan
Action
PlanAction
Plan
Investigate and
assign actions on
relevant cases
Insight / Prioritization Issues
(Risk weight & model review)
Issues
Action
Plan
Action
PlanAction
Plan

9. Copyright © 2018 Accenture. All rights reserved. 9
FROM UNDERSTANDING TO OUTCOME: ENHANCED SUPERVISION
Projects typically begin with an assessment to understand key business risks, diagnose issues within current supervisory
arrangements and capabilities, and align leadership on key objectives. From Accenture’s experience, success is found by firms that
focus on change management, communications and fostering key business partnerships (i.e. with Human Capital Management) in
addition to defining future state vision.
Perform risk
assessment and
identify priority risks
Review supervisory
arrangements, practices
and capabilities
Design sustainable
future state business
supervision model
Perform talent review
and determine talent
management decisions
Implement
sustainable program
& track success
1 2 3 4 5
Current State Assessment Future State Design Supervision Transformation
Risk and Current State Capability Assessment
estimated at 6-12 weeks
Future State Vision & Sustainable Program Design
estimated at 10-14 weeks
Delivery & Implementation
estimated TBD
• Difficulty to articulate a strategic vision and benefits at company level or define why the transformation is required
• Lack of understanding on the firm growth profile and its supervisory requirements results in poor investment in infrastructure and a misalignment in resources
• Centralized supervisory arrangements fail to grasp key local nuances and increase potential risk exposures
• Existing resources lack skills to meet future state role responsibilities; hesitation in exiting staff who do not meet the desired skills resulting in lack of fit
• Failure to develop training programs to support transition of existing staff and onboarding of new resources results in critical skill gaps to meet new responsibilities
• Need to navigate technology advances and proliferation of market solutions and address challenges of integrating solutions for data quality / standardization
Managing Change Complexities

10. Copyright © 2018 Accenture. All rights reserved.
CONTACTS
Craig McIntosh
Accenture Capital Markets
Wealth Management Analytics Lead
craig.mcintosh@accenture.com
Zachary White
Accenture Finance & Risk
zachary.d.white@accenture.com
Samantha Regan
Accenture Finance & Risk
Global Regulatory and Compliance Lead
samantha.regan@accenture.com
Bailey Hansford
Accenture Finance & Risk
bailey.hansford@accenture.com
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