In 2022, the most successful financial planning businesses operate a model focused on client-centric holistic strategic advice, rather than investment management, as their key service offering.
The 'Value of Time' report by the technology and investment business, SEI, described a remarkably significant difference. Those businesses that focus on holistic strategic advice:
- Attracted three and a half times more new clients per year
- Had a 67% greater growth in FUM per annum
- Attained a 132% higher growth in business value over ten years
The data is compelling.
The critical insight is that the greatest return on time and cost investment comes from focusing on the client and providing holistic strategic advice. Conversely, that investment management at an individual client level does not return the same value financially. Moreover, the time occupied by investment management distracts advisers from working with and winning new client business.
So, strategic advice is key to creating valuable client relationships and business value. But what about portfolio management?
Outsourced portfolio management is the essential ingredient of the high-value business model. Placing portfolio management in the hands of specialists is to delegate portfolio management to those that derive value from scale and can therefore resource it appropriately. It takes a similar amount of effort to manage $1 million as it does $100 million.
The benefits for advisers in outsourcing portfolio management are:
- Time saved on activities such as market and product research
- Increases the time available for client meetings and generating new business
- Lowers the time, cost and resourcing requirements for implementation and ongoing administration
- Lowers the risk of not getting portfolio construction and management right – a dilemma that's magnified during times of challenging market environment
- A full-time dedicated, appropriately skilled and resourced team that can improve portfolio construction and ongoing management
- With the right solution, faster implementation can help keep pace with market changes.
In short, you use the right tool for the right job and, in the process, save time, lower resource costs and simplify your business.
Now let's step back for a moment and consider the ideal solution. Suppose you were to choose to work with a professional portfolio management team. What would it look like?
- The portfolio manager's investment beliefs and philosophy would ideally align with your own
- The range of portfolios should be able to meet all your client's needs. Otherwise, you still have to get involved in research and portfolio construction, in which case, the benefits of outsourcing are reduced
- The portfolios should demonstrate that they align with the client's needs to ensure compliance with Best Interests obligations.
- The blend of portfolios should precisely align with the adviser's strategy.
- Portfolio implementation would be easy and integrate with popular administration services
- Reporting would be available in real-time, be detailed and transparent to the adviser and client
A solution like this would revolutionise the adviser-client engagement by remaining firmly focused on what the client wants and the strategic advice the adviser provides.
Finding the right team to work with
Advisers will be pleased to know that this solution is available today. The Dynamic Asset managed account solution delivers all of these benefits. It enables advisers to realise the advantages of focusing their business on holistic strategic advice without doing all the research, portfolio management, and implementation services that don't add as much value to your business.
Dynamic Asset provides a range of five actively managed client-focused portfolios administered through managed accounts, either SMA's or MDA's, across both wealth and super. This offers the full suite of portfolios you need to meet all your client's needs. Advisers can use our unique Portfolio Construction Tool to allocate portfolios to match the client's needs through the well-understood 'Bucket Approach', helping satisfy the Client's Best Interest obligations of advisers. The portfolios are currently available on leading platforms such as Hub24, Allan Gray and Mason Stevens.
Learn more about the Dynamic Asset approach to investment and Contact us today to learn more about Dynamic Asset and how they can help you achieve your business goals.
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