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What ‘should’ your client portfolios be ?

By 17 November 2016November 8th, 2022No Comments

With increasing penalties and fines being issued by regulators for advice firms not actually providing advice for the fees that they have charged their clients, there is increasing focus on what is required to be done to demonstrate ongoing advice for ongoing fees to investors.

One part of the discussion around this is firms considering at all points in time as to what a client portfolio ‘should’ look like, and then monitoring the actual client portfolio to such, with periodic advice to any changes required.

For many this activity can be quite a complex and time consuming task, especially when what the client’s portfolio ‘should’ look like is far from easy to define, perhaps because the client has provided some specific instructions as to things that they want considered.

The necessity to however automate this is something that firms will largely seek to achieve because of the potentially high amount of work required to achieve such across a client base of possibly hundreds or thousands of client portfolios.

In many cases this introduces the idea of template or model portfolios, as these often provide a basis of what a portfolio should look like and are a basis for a scale-able process. However regulators around the world are concerned about such an approach and the effect that this can have to ‘shoe horn’ clients into set  investment strategies rather than put the interests or needs of the clients first.

At Financial Simplicity we have spent many years finessing the process of combining individual clients rules, preferences and constraints with firm based template or model portfolios to provide the best of both worlds, client first yet with the efficiency of business scale. The key to this being that this process has embedded into it a way that can define what client portfolios ‘should’ look like when there are complexities associated with client specifics.

Do you know what your client portfolios ‘should’ look like ? and have a repeatable process for such  ?


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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