Here’s a closer look into some of the technological innovation that platforms like Luma provide to help firms more efficiently manage structured products.
Platforms can simplify and automate processes that require multiple steps and/or a significant amount of manual activity such as data entry or order management. For example, with an online system, advisors can easily apply various product filters – issuer, underlier, tenor, etc. – to more efficiently identify, compare and select the right product. When submitting an order, instead of conducting the transaction via phone calls and emails, advisors can instead place, track, and manage orders through an online order-entry system. Finally, the system also organizes and stores all trade information and documentation within a digital archive for easy reference and retrieval later.
Custom Pricing Deals and Lower Notional Amounts
The automation capabilities of platforms are shifting how investment firms manage custom deals. Advisors can explore new opportunities outside of the monthly product offerings by submitting requests directly to an issuer through a live quotation system. Instead of sending out multiple emails and tracking updates through spreadsheets and phone calls, the entire process can be housed under one system, increasing efficiency and providing advisors with additional investment opportunities for their clients.
By automating many of the processes involved with creating custom deals, platforms have lowered the notional amounts required to make these types of deals. “I could see issuers offering bespoke deals as low as 300,000 to 500,000 – potentially even lower than that.” – suggests Tim Bonnaci.
Education and Structured Product Videos
Issuing smaller notional is obviously part of what these platforms offer, but their focus is primarily on education and the democratization and demystification of the product,” says Stanislas Varin, head of structuring and product development for the Americas at Credit Agricole. “That’s the difference between the US, Asian and European platforms – the first focus for all the US platforms is primarily education.”
Platforms provide educational content containing client-approved multimedia content such as videos and PDFs that present structured products in a very clear and understandable manner. These equip advisors with resources to easier explain structured products to clients who are new to these types of financial vehicles.
In addition to educational resources, platforms can place certain products behind educational barriers, preventing advisors from accessing them until a proper certification program has been completed. These barriers provide additional layers of control to ensure that their advisors have achieved an appropriate level of training before they can sell a particular product set.
You can read the full article published by Risk.net here: https://www.risk.net/derivatives/6590726/meet-simon-luma-and-halo-they-trade-structured-products.
For more information on Luma’s features, check out this link here: https://lumafintech.com/lumaplatform/
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