Vontobel has deployed ImpaQt, a new advisory software developed by Swissquants that will allow fully integrated checks of the risk profiles of structured investment products to be carried out in a portfolio context by investment advisors prior to issuance on the bank's Deritrade multi-issuer platform (MIP).
The link between Deritrade MIP and ImpaQt means that investment advisors will, for the first time, be able to carry out pre-trade checks of the risk profiles of the product concepts they develop - and to do so in the context of the individual client portfolio, according to Roger Studer, head of Vontobel Investment banking.
'We want to provide Deritrade MIP users with new functionalities that will further enhance the quality of our advisory offering for our clients,' said Studer, adding that this can be achieved through the use of 'state-of-the-art and globally leading digital technology' which will also ensure full compliance with all regulatory requirements prescribed by Markets in Financial Instruments Directive (Mifid 2).
According to Nathaniel Zollinger (pictured), head of derivatives applications at SwissQuant, this is another step towards the digitalization of structured products offering in Switzerland which goes beyond the SP Portfolio Optimizer tool launched earlier this year by the Swiss Structured Products Association (SSPA).
"SP Portfolio Optimizer is aimed at enabling retail investors and relationship managers to learn more about the impact of structured products in client portfolios and how to make profitable use of structured products in a portfolio context," said Zolllinger. "ImpaQt goes a step further as it is a full advisory software which is compliant with Mifid 2 and Finma's rules on the advice process. The new tool includes a questionnaire, as well as portfolio optimisation and management."
ImpaQt is also more than just a robo-advisor because it offers as portfolio management capability, and addresses the needs of the Swiss market where a major proportion of structured investment products are issued via digital platforms in primary markets, said Zoillinger.
Deritrade MIP is used by more than 50 banks and 450 asset managers while ImpaQt is the flagship risk analysis and advisory software from swissQuant Group which "is successfully established in the Swiss banking landscape".
The collaboration between Vontobel and SwissQuant brings an innovative solution that sets new standards in the investment advisory process for structured investment products and adds value to Deritrade MIP's platform during the investment advisory process, according to Studder.
The agreement between Vontobel and SwissQuant follows the Swiss Structured Products Association's (SSPA) launch of the swissQuant Group tailor-made app, which provides relationship managers and investors with a simple and comprehensible tool to illustrate the added value of structured products in the portfolio, on February 2017. The combined solution from Vontobel and SwissQuant carries out an integrated risk analysis in the actual client portfolio - within the banking system -before the structured investment product is issued.
ImpaQt is an on-demand system for quantitative risk management and investment suitability checks that provides risk analysis and also examines the suitability of individual instruments in a portfolio context.
ImpaQt uses the Six Financial Information data pool, which consists of market data time series as well as reference data and information on millions of financial instruments. The high-speed system is based on proven calculation methodology. Structured products issuers can integrate their platforms into ImpaQt and other portfolio advisory systems via SwissQuants' DerivaRisQ, which enables client advisors and portfolio managers to visualize market scenarios interactively and to satisfy client demand for objective analysis.
SwissQuant joined the Swiss trade body, with the goal to help investors to better understand the risk return patterns of structured products in a portfolio context as well as to perceive market risks and to show the benefits of strategic usage of structured products.
Vontobel remains the leading provider of structured products in Switzerland (41% market share) with over 9,000 products marketed in 2016 worth an estimated CHF7.9bn. Year to date, the bank has issued over 2,000 products worth an estimated CHF1.6bn.
Earlier this year, in March, Vontobel joined the Swiss Dots platform for over-the-counter (OTC) structured products launched in 2012 by Swissquote Bank, UBS and Goldman Sachs, which now also includes Deutsche Bank and Commerzbank; and launched a new mobile app for Swiss clients that will connect investors to the Derinet online portal and the Deritrade digital marketplace, where they can design and issue, access price comparison and monitor tailor-made structured products.
Related stories:
Vontobel expands Bitcoin offering
Vontobel's Deritrade arrives at Ariva and Boerse Frankfurt
Vontobel makes structured product issuance mobile
Vontobel move to join Swiss Dots OTC platform adds pressure to Six Swiss Exchange's XBTR venue