ARTICLES

Dynamic Asset Consulting recently announced that privately-owned financial adviser dealer group Finchley & Kent has added the Dynamic Asset Managed Account and investment management solution to its approved product list (APL).

Once you've determined that your financial advice firm would benefit from the efficiency and transparency of a Managed Account solution, or you're simply starting to explore options, then the next step is to find a platform that will meet the unique needs of your business and clients. 

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.

Are you looking to service more clients efficiently, while still meeting each individual's unique investment needs? A Managed Account can do just that, leaving you with more time and resources to nurture your business.  

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.

Investment advice is often considered by both clients and financial planners as a vital component of a thriving financial planning business, making it essential to get right.

Let us examine what happens when the clear and present danger from the coronavirus meets the global asset bubble, your portfolio and the industry standard investment approach. This is no small issue because – contrary to a market consensus – the coronavirus (COVID-19) is actually a real threat to complacent equity markets and client portfolios. It is a global health pandemic which requires active management in the real world, and which should also be risk managed by your adviser or super fund. The coronavirus and its real-world management should not simply be dismissed as just another flu, and could even be the catalyst which bursts the global asset bubble.

New consumer-centric financial product and distribution obligations from April 2021 offer astute financial advisers an opportunity to not only meet the requirements, but to gain an edge in achieving superior client outcomes and improve their business practices.

Many portfolios traditionally use government bonds and cash to be defensive. With bond rates and cash rates now at historic lows, there is no longer much yield or return that one can expect from a long-term investment in these. Furthermore, the likelihood of losing money over time in real terms is now higher, given it now requires little inflation to overcome the mediocre expected return from historically low yields. Unfortunately, such a situation reflects lacklustre economies and is the end result of market returns being pulled forward by government intervention. Traditional defensive investments have simply become a tool of government policy as governments attempt to prolong an ‘artificial’ economic expansion. 

Goals Based Investing (GBI) continues to gain recognition and be better understood amongst advisers. In his article Goals Based Investing: Should it be the norm? Giuseppe Ballocchi describes GBI as the way of the future for financial advice. Are we finally seeing a shift from the more traditional Strategic Asset Allocation approach to GBI? The simple answer is yes. Why, because it makes sense. Client goals should determine investment decisions. And, there is a rising school of thought that SAA investing will not suit likely market conditions going forward.