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AllianceBernstein ® and the AB AllianceBernstein logo are trademarks and service marks owned by AllianceBernstein L.P. Merrill Lynch Banking & Financial Services Conference November 12, 2008 David Steyn Executive Vice President Global Head of Client Service and Marketing
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  • AllianceBernstein and the AB AllianceBernstein logo are trademarks and service marks owned by AllianceBernstein L.P.

    Merrill Lynch Banking & Financial Services Conference

    November 12, 2008

    David SteynExecutive Vice President

    Global Head of Client Service and Marketing

  • Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein1

    Cautions regarding Forward-Looking StatementsCertain statements provided by management in this presentation are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. The most significant of these factors include, but are not limited to, the following: the performance of financial markets, the investment performance of sponsored investment products and separately managed accounts, general economic conditions, future acquisitions, competitive conditions, and government regulations, including changes in tax regulations and rates and the manner in which the earnings of publicly traded partnerships are taxed. We caution readers to carefully consider such factors. Further, such forward-looking statements speak only as of the date on which such statements are made; we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements. For further information regarding these forward-looking statements and the factors that could cause actual results to differ, see Risk Factors in Part I, Item 1A of our Form 10-K for the year ended December 31, 2007 and Part II, Item 1A of our Form 10-Q for the quarter ended September 30, 2008. Any or all of the forward-looking statements that we make in this presentation, Form 10-K, Form 10-Q, other documents we file with or furnish to the SEC, or any other public statements we issue, may turn out to be wrong. It is important to remember that other factors besides those listed in Risk Factorsand those listed above could also adversely affect our revenues, financial condition, results of operations, and business prospects.

  • Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein2

    We improve investor outcomes by our actions and those of our partners

    We do so profitably and sustainably

    This is a good time for rigour, to look at what you want to come out with at the other end of the tunnel. This is not a time to skimp on resources but to focus them on your best businesses: stop the weakest, invest in the strongest.

    Jack WelchFinancial TimesJuly 26, 2008

    Our Best Businesses are (or will be) ones where:

  • Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein3

    Our Business

    Invest

    Sustainable Profitability HighLowA

    lignm

    ent

    Hig

    hLo

    w

    Manage to Improve Profitability

    Divest Manage to Improve Alignment

  • Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein4

    Institutions

    PrivateClients Retail

    That Was Then

  • Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein5

    Shared Offices

    SPMs

    Latin America

    Endowment & Foundations

    This Is Now

    Client Communications

    Training

    Planning & Analysis

    Pooled Vehicles

    Regional Sales Managers

    BDMs & Investment Directors

    Sub-Advisory

    Defined ContributionPrivateClients

    Institutions

    Retail

  • Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein6

    AUM by Service

    Revenue by Service

    AUM by Client Domicile

    Non-US47%

    US53%

    That Was Then: Our Story in 2007

    Non-US59%

    US41%

    Non-US68%

    US32%

  • Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein7

    This Is Now

    Demographics Globalization

    US Pension Protection Act

    2006

    FAS 158

    UK Pensions Act 2004

    FRS 17

    Regulation & Accounting Financial & Technological Innovation

    One World Portfolio

    Alpha-Beta:Isolate, Integrate and ImmuniseVolatility

    Longevity

  • Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein8

    The Changing Face of Our Business

    Unique Risk

    Pooled Risk

    Not Rich Rich

    High Net WorthIndividuals/FamiliesIntermediated Savers DC Participants

    DB Plans

    Beta Sensitivity Alpha SensitivityBest Advice

    High Net WorthIndividuals/FamiliesIntermediated Savers DC Participants

    DB Plans

  • Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein9

    Not Rich

    Unique Risk

    Pooled Risk

    Rich

    High Net WorthIndividuals/Families

    The Changing Face of Our Business

    Intermediated Savers

    DB Plans DC + DB Plans

  • Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein10

    The Changing Face of Our Business

    Source Alpha Platforms Assembled Advice Platforms

    Anchored to Market Outcomes

    Global

    SingleCountry

    Global+

    Emerging

    130/30

    Currency Overlay

    Anchored to Client Outcomes

    CustomizedRetirementStrategies

    LDI

    RetirementStrategies

    WealthStrategies

    Global Retirement Strategies

  • Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein11

    Source: McKinsey Analysis

    US DC AUM Projections$ Trillions

    2006

    $4.1

    Asset Appreciation (at 6.1% CAGR)

    $3.0

    2015

    $7.58.5

    Inflows

    $3.34.4

    3.04.0

    0.20.10.2

    New PlansNew Participants

    New Contributions

    Outflows

    $(2.63.8)

    0.30.5

    2.33.3IRA Rollovers

    Withdrawals

    The Changing Face of Our Business

  • Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein12

    The Changing Face of Our Business

    Past

    Simple Technology

    Hard to use

    Expensive

    Future

    Complex Technology

    Easy to use

    Inexpensive

    http://www.lexus.com/lexus-main/models/LS/

  • Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein13

    No guidance, expansive choice

    Company stock, stable value

    IRA rollover and withdrawals

    Participation and deferral rates

    Record keeper controlled

    Past

    Automation, focused choice

    Low-cost custom target-date funds

    In-plan guaranteed income

    Retirement income adequacy

    Best-in-class open architecture

    Future

    Plan Design

    Accumulation

    Decumulation

    Plan Metrics

    Providers

    The Changing Face of Our Business

  • Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein14

    The Changing Face of Our Business: Back To The Future

    Source: AllianceBernstein

    SimpleParticipation

    Low Cost

    SecureLifetimeIncome

    1

    2 3

    4

    Plug and Play Multi-Manager Structure

    Cost-Efficient Institutional Vehicles

    Well-Researched and Documented Design

    Customizable to Plan-Specific Needs

    Consulting and Project Management

    Full Suite of Communications Content

    Integration of Design Within Target-Date Structure

    Clearing House for Insurers and Recordkeepers

  • Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein15

    Why Is Partnering So Important?

    Record Keepers Asset Managers Insurers

    Investment Only

    Customized Retirement Strategies

    Secure Retirement Strategies

  • Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein16

    Why Is Partnering So Important?

    Investment Only

    Record Keeper

    Investment Manager

    Investment Manager

    Plan Sponsor

    Investment Manager

    AB

  • Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein17

    Why Is Partnering So Important?

    Customized Retirement Strategies

    Record Keeper

    Investment Manager

    Investment Manager

    Plan Sponsor

    Investment Manager

    AB

  • Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein18

    Why Is Partnering So Important?

    Secure Retirement Strategies

    Record Keeper

    Investment Manager

    Investment Manager

    Plan Sponsor

    Investment Manager

    AB

    Insurer

    Insurer

    Insurer

  • Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein19

    Employer-Based Defined Contribution Plans

    Source: SPARK Marketplace Update, 2008

    $725

    $300$230 $170

    $2,860

    Total Assets: $4.1 Trillion

    457

    401

    403(b)

    SEP, SIMPLE, Solo(k)

    Federal Employees Thrift Plan

  • Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein20

    Employer-Based Defined Contribution Plans

    Source: SPARK Marketplace Update, 2008

    $300$230

    $2,860

    $170

    $725

    Total Assets: $4.1 ^ Trillion$3.7

    457

    401

    403(b)

    SEP, SIMPLE, Solo(k)

    Federal Employees Thrift Plan

  • Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein21

    Employer-Based Defined Contribution Plans

    Source: SPARK Marketplace Update, 2008

    $1,430

    $170

    $725

    $1,430

    $ 1,600Existing Sales Force (Supported by ABDC)

    $300$230

    Total Assets: $4.1 ^ Trillion$3.7

    $2,155 ABDC Sales

    457

    401

    403(b)

    SEP, SIMPLE, Solo(k)

    Federal Employees Thrift Plan

  • Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein22

    BernsteinAdvisors

    ABIAdvisors

    US DC StrategyPlan Size: $0-50M $50-300M $300M+

    AUM: $1.1 Tril. $0.9 Tril. $1.7 Tril.

    ABDCAdvisors

    $3.7 Tril.

    InstitutionalAdvisors

  • Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein23

    US Private Client Strategy

    2003 Five Year Growth Plan:

    Expand local market presence to covermajority of US wealthy households

    Grow Advisor staff from 175 to 350

    Explore international markets December 31, 2003

    June 30, 2008 CAGR (%)

    AUM $51 Billion $100 Billion 16.1%

    Client Relationships 21,000+ 33,900+ 11.3%

    Advisors 166 330 16.5%

    Offices 11 19 US Coverage of Wealthy Households 35% 60%

    US Square Footage 176K 369K 17.9%

    Existing Offices 176K 287K 11.5%

  • Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein24

    US Private Client Strategy

    One dot = 250 households with > $2MM in investable assetsSource: Claritas 2008

  • Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein25

    Expansion Options: Evaluation Factors

    Hig

    h Le

    vera

    ge o

    f Firm

    Res

    ourc

    es

    Effective New Advisor Development Environment

    Existing Offices

    AffiliatedOffices

    New Markets

    ResidentAdvisor

  • Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein26

    US Private Client StrategyM

    argi

    n

  • Merrill Lynch Banking & Financial Services ConferenceAllianceBernstein27

    US Private Client Strategy

    2007 Revenue Per Advisor*2007 Average AUM Per Advisor*

    $ In Millions

    *Excludes Advisors hired during the calendar yearSource: Bernstein

    $445

    $105 $104 $90

    Bernstein MerrillLynch

    SmithBarney

    MorganStanley

    $4.0

    $0.8 $0.8 $0.7

    Bernstein MerrillLynch

    SmithBarney

    MorganStanley

  • AllianceBernstein and the AB AllianceBernstein logo are trademarks and service marks owned by AllianceBernstein L.P.

    Merrill Lynch Banking & Financial Services Conference

    November 12, 2008

    David SteynExecutive Vice President

    Global Head of Client Service and Marketing

    Cautions regarding Forward-Looking StatementsOur BusinessThat Was ThenThis Is NowThat Was Then: Our Story in 2007This Is NowThe Changing Face of Our BusinessThe Changing Face of Our BusinessThe Changing Face of Our BusinessThe Changing Face of Our BusinessThe Changing Face of Our BusinessThe Changing Face of Our BusinessThe Changing Face of Our Business: Back To The FutureWhy Is Partnering So Important?Why Is Partnering So Important?Why Is Partnering So Important?Why Is Partnering So Important?Employer-Based Defined Contribution PlansEmployer-Based Defined Contribution PlansEmployer-Based Defined Contribution PlansUS DC StrategyUS Private Client StrategyUS Private Client StrategyExpansion Options: Evaluation FactorsUS Private Client StrategyUS Private Client Strategy