In an age of point and click investing, how does a financial services company that has traditionally led on advice differentiate itself? For Canadian-based RBC, it’s offering tailored investment services that incorporate emerging technology with proven adviser expertise while giving clients the flexibility to invest when, where and how they want to, writes Douglas Blakey
Stuart Rutledge, Senior Vice-President, Personal Savings & Investments, RBC, has led the bank’s savings and investment division since 2017. Over that time he has seen the continuing rise of fintechs and robo-advisors, and while many things have changed, some things have remained constant.
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“We know that investing is not an easy topic for many people. What’s most important is having that first conversation and identifying long and short-term goals,” he tells RBI. “And while the idea of automated investment management definitely has its place for some people, we find that others definitely want to understand their portfolio and how it will help them achieve those goals.”
RBC proved that theory with the launch of RBC MyAdvisor last year, an innovative service that complemented the in-person branch process with the ability for clients to connect with an investment adviser in real time through video or phone in order to develop a personalised plan in as little as 10 minutes.
My Advisor: more than 700,000 clients since launch
It may seem like a small change, but since its launch, more than 700,000 clients have activated investment plans through the service, including clients aged 55 and older, where the number of plan holders has doubled in a year.
The service has been so successful, it was awarded RBI’s ‘Best Customer-Facing Technology’ award.
“We’ve been able to extend planning to a much broader client base and our clients have given MyAdvisor one of the highest ‘likelihood to recommend’ (LTR) scores we’ve seen at the bank,” says Rutledge.
RBC’s approach focuses on improving and customising the investment experience. They are combining emerging technologies like Artificial Intelligence [AI], with the expertise of their teams on-the-ground, while improving the ease and convenience of interfaces. In fact, there is often no difference in the screens that both clients and advisors have access to.
“We’re really starting with the client and we know there’s not a one-size fits all solution. Clients expect choice and flexibility. Some will choose to manage their own investments, some will want full-service or full automation, while others will prefer a combination,” he says. “All clients, however, value the ease of access.”
That ease of access is a key feature not only of MyAdvisor, but RBC InvestEase, the bank’s online investment service – which provides automated portfolio recommendations, expert portfolio management and advisor access. The service targets clients that may have put themselves on the sidelines because they feel they don’t have the time or knowledge to participate in an investment plan.
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By GlobalData“There was a time when many people felt you had to really know the market to benefit from an investment plan or investment advice,” says Rutledge. “With technology and digitisation we’re able to bring investment advice and services to more clients through customised services that build their comfort levels and help them reach their financial goals. It’s a client-first experience and we’re only at the tip of the iceberg.”
RBC a record-breaking financial performance in 2018
In 2018, RBC posted a record C$12.4bn in net income – an 8% increase over 2017 – and earned more than $12bn for the first time in its history. It again met and exceeded all of its medium-term objectives. It delivered double-digit diluted earnings per share growth of 11% (above a target of 7.5%). It raised its dividend by 8% and returned a further C$1.5bn of capital to shareholders buybacks.
RBC has paid out C$42bn of dividends over the last 10 years and has the leading total shareholder returns among its Canadian peers: 11% over the past five years.
RBC is building long-term client franchises and delivering a premium return on equity, even as it invests in an innovative digital strategy and pursuing its focused growth strategy in Canada, the US and key global markets.
RBC’s premium ROE (adjusted) is a class leading 17.9%.
Meanwhile, it is improving its business efficiency. RBC’s bank-wide adjusted efficiency ratio was 53.1% for 2018, an improvement of 70 bps from 2017.
In 2018, RBC strengthened its CET1 ratio to 11.5%, up 190 bps since 2013, and maintained one of the highest debt ratings for banks globally.
RBC: ranked 1st, 2nd by market share in all segments
RBC’s retail banking dominated Canadian Personal & Commercial Banking unit maintained its #1 or #2 position in all key local banking categories, including business loans and deposits among the Big 5 Canadian Banks, and it maintained its market leadership in home equity financing and overall consumer lending among its Canadian peers.
In addition, RBC is the first Canadian bank to launch an Application Programming Interface (API) developer portal in March 2018. By providing eligible external developers, industry innovators and clients with access to select RBC APIs, it has the opportunity to increase connectivity, create new tools and experiences for clients, and enable open and innovative collaboration to improve the future of banking.
