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Better Business Value

Centralised or Decentralised Investment Propositions

Much talk over here at the moment in the UK about centralised investment propositions. In short, this appears to be about operating a centralised process of investment management for a broad range of clients: these are most often segmented in a sensible manner allowing for risk tolerance and investment timeframe.

However, running contrary to this view, there is much talk also about the need to have client-specific investment propositions that are tailored to each client.  Indeed, there is an emerging school of thought that it may not be good practice to just move clients into a centralised investment proposition.

Mmmm. I sense an issue here.

Perhaps there is an answer in between that addresses both views:

  • Centralise the common aspects of a centralised investment proposition such as investment research or model portfolios, centralise the technology servers to help advisers make decisions, centralise the data feeds to provide portfolio context; and
  • De-centralise the use of the technology, and the client-specific directives into the implementation process so that whomever is dealing with the end investing client can ensure that the common philosophy and process are implemented according to the client’s situation

Hey presto !

The devil is in the detail here, but with the right technologies and processes, why can’t the industry have the best of what initially may appear to be conflicting directives?

Stuart Holdsworth

Author Stuart Holdsworth

Stuart has over 30 years of experience in the use of technology for the strategic competitive advantage of businesses in the financial markets and investment industry.

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