PrivateWealth Inc.

PrivateWealth Inc. is a financial planning and investment management company that serves over half a million individual Canadians, from coast-to-coast. The company provides tailored financial planning and a wide range of investment products to its clients via a network of 2,000 financial advisors. The main focus of the company is to help its clients to achieve their personal goals (e.g., saving, retirement, tax and estate planning) via detailed financial planning and then matching their plans with the company's investment product offerings. The company also offers various insurance, mortgage, and short-term loan products.

External Environment

PrivateWealth is exposed to various changes and risks. Federal fiscal and monetary policies greatly impact the investment industry where PrivateWealth operates. When major local and international economic, or political, events occur, they usually affect the company's bottom line. Technological advancements disturb the sector, by creating opportunities to cut costs and provide better services to the clients.

Private Wealth also operates in a highly regulated industry. Investment Industry Regulatory Organization of Canada (IIROC), Mutual Fund Dealers Association (MFDA), Canadian Securities Administrators (CSA), Office of the Superintendent of Financial Institutions (OSFI), and the Canada Revenue Agency (CRA) are some of the main federal regulatory organizations.

Finally, the competition level in the industry is very high. Large banks, credit unions, and other investment dealers/brokers compete with PrivateWealth for a share in the private wealth management market of Canada. The competition and other external factors require PrivateWealth to always stay agile and flexible in its day-to-day and long-term operations.

Competitive Advantages

A network of financial advisors is a crucial element in PrivateWealth's business model. It is the advisors' personalized interactions with clients that put PrivateWealth apart from other big, one-size-fits-all players. At the same time, the company has to offer a wide range of products to address the personalized needs and plans of the customers. The advisors' superior service and innovative product offerings are the main reasons that PrivateWealth is different from other investment, insurance, and mortgage brokers.

Main Contributors

Comprehensive commission strategies, policies, and systems are key contributors to the financial advisors' superior service and the company's bottom line.

These strategies, policies, and rules are the responsibility of the following key business units:

• Advisor Commission and Support is the main department responsible for incentivizing and supporting Financial Advisors' practice. The department owns the existing commission system.
• The Field Office Operations department is responsible for supporting advisors in the field. They update advisors' information and enter clients' transactions. Most of the administrative and manual tasks related to the advisors' commission is performed by this department.
• The Head Office Operations department is responsible for supporting the Advisor Commission and other departments in the HO. The department investigates and corrects Advisors Commission related issues and adjustments. The department is also second level support for the Call Center and Field Office Operations.
• The Financial Advisor Compliance department is responsible for monitoring the advisors' and clients' financial activities. They ensure that the regulators' rules and the organization's best practices are followed.

Multiple highly integrated applications (see Figure 1) make up the system component of the solution:

• The Commission system calculates and pays commissions to financial advisors. Advisors pay-slips and CRA forms are generated from the commission system. The system can provide all necessary operational and management reports.
• The Advisor Data Administration system provides the capability to enter and manage financial advisors' names, addresses, certifications, training, tenure, achievements, subordinates, office information, team information, personal choice benefit information, etc. All necessary information is passed to the commission system for calculations.
• The Client Account Administration system is used to manage the clients' accounts. The system maintains client account balance, transaction, and investment/product information. It generates all the necessary reports and statements.
• The Product Management system is used to combine and manage client investments. Investment products and instruments are created in the product management system.
• The Advisor Web Portal is a central information access point for the financial advisors. Advisors can find all the necessary information on the portal.

Figure 1. Current State. Created by Bekzod Ruzimatov for Extended Education, 2019. Used with permission.

Time for a Change

Although business policies and rules are constantly reviewed and updated, PrivateWealth's existing commission system is outdated. It was built and is maintained on 30-year-old technology. PrivateWealth's leadership recognizes that its age creates considerable operational risks and decides to replace the old commission system with a modern application.

The leadership initiates a commission system modernization project, deciding that there must be one-to-one replacement of the existing solution and it must be completed within one year. Additionally, the initiative must not impact day-to-day operations and should not be visible to advisors.

Unplanned Events

The project to replace an existing commission system has been running for six months. Most of the analysis and design work has been completed when the following events started to happen:

• The management decided to launch its own Electronically Traded Fund (ETF) within the next two months. It will require an integration of a third-party fund management system into the infrastructure.
• A different initiative to develop a mobile application for financial advisors is funded. The app will use data from the commission system and has different data requirements than that of a web portal.
• The lead developer for the new commission system leaves for a new opportunity. Finding a lead developer will take time.
• The Contact Center wants to get a new dashboard where they can see all information for an advisor. It will help them to improve their service to the advisors.
• The Head Office Operation department requests a set of new screens in the new commission system.
• The vendor publishes a new version of the platform with fixes to known issues and new functionalities.
• It turned out that most of the reports that were available in the old system are not readily available in the new system. It will either require more resources or use another application/system for reporting.

You are the project's business analyst. The project manager is concerned about these events and asks you to prepare a change assessment document. Review the changes in detail and write up a change assessment document.

QUESTION

1. Write a report (500-word maximum) to a project sponsor, outlining risks associated with potential changes. Your report should include:
   1. the identification of risks;
   2. an analysis and evaluation of risks; and
   3. recommendations to address risks.