The Merriam-Webster Dictionary defines the word solution as: the action or process of solving a problem. Using this definition is a helpful way of assessing the benefit of the many investment solutions available to advisers today. Does what's on offer genuinely solve your business problem?
The superannuation and investment market is rapidly transitioning to Managed Accounts, with many also electing to use Managed Portfolio solutions as part of that transition. Funds in Managed Accounts are now estimated to be over $145B*. It's for good reason. Increasing client awareness and the rising costs of compliance reducing adviser margins demand new ways to satisfy clients and drive business efficiency.
Investment portfolio management is central to every financial adviser's value proposition and day-to-day life. How you go about portfolio management for your clients and your business creates client value and maximises your workflow efficiency.
It was nearly 60 years ago, back in 1964, that Bob Dylan wrote his anthem of change: The Times They Are a-Changin'. And so they were.
As the pressure on the economy and markets rises, so too does the business risk that financial advisers face in relation to being able to deliver portfolio returns client's need and to any investment-linked revenue.
Rising inflation, tightening interest rates and market volatility are firmly established trends for 2022. It’s a state of play that puts the active asset allocation front and centre.
In recent years, there has been a chorus of leading investment managers advocating a new approach to portfolio management. Existing methods appeared frail, were beginning to fail or appeared ill-suited to the current and prospective world. Ultra-low interest rates had decimated returns from bonds and cash. At the same time, record fiscal stimulus pushed risk assets such as property and equities into bubble territory while the macroeconomic environment deteriorated.
In today's increasingly complex world, consumers need quality financial advice more than ever. Yet many advice firms are struggling; overburdened by regulatory and compliance obligations that are making it difficult to scale their business and keep fees affordable, resulting in more work for not necessarily any more profit. Too often, these are the advisors that are failing to capture the opportunity to modernise their business in response to changing industry requirements and customer needs.
The effective management of goals based investment portfolios requires strong investment skills together with ample time and resources, but in return, rewards financial advice firms with satisfied clients and superior business outcomes.
Strategic asset allocation, the hallmark investment approach of financial advisory firms who use risk profiling to determine a client’s investment portfolios, is under the spotlight, with an increasing number of investment firms questioning whether the strategy remains appropriate in light of the seismic shift seen in financial markets over the past decade.
