HUB24 has recently published a paper, produced in partnership with Milliman. The paper talks to the subject: Measuring the cost of delay, which we have referenced here.
Financial advisers who manage their client’s investment portfolios are facing crunch time as the ability to do this becomes increasingly challenging. In the post-FOFA and Best Interests Duty operating environment, advice practices must find a scalable way to meet their client’s demand for greater portfolio customisation and better investment outcomes while delivering a valued customer experience.
A fundamental element of financial planning is to provide solutions tailored to individual client circumstances.
HUB24 partnered with Milliman to explore the challenges advisers face in running portfolios for their clients inhouse. These include the cost of time constraints associated with making portfolio changes to individual portfolios inhouse versus the benefits of automatic implementation which can be achieved through accessing investment expertise through managed portfolios.
Intuitively, the benefits derived from automatic implementation of investment changes to client portfolios adds up - advisers can design appropriate strategies to meet their clients’ individual needs and be confident their client’s investment portfolios are automatically updated at scale in line with the portfolio manager’s strategy.
Financial advisers are responding to the benefits of managed portfolios, with the latest Investment Trends February 2021 Managed Accounts Report finding 44% of advisers have used and intend to continue using managed accounts, up from 40% in 2020 and 35% in 2019.
Further, planners’ allocation of new client inflows into managed accounts has accelerated, now at 17% up on average from 12% in 2020.
The increased traction of managed portfolios reflects the innovative functionality available through managed portfolio solutions from providers such as HUB24, which provide financial advisers with greater flexibility and capability to adapt portfolios to add value and create better outcomes for their clients.
The Investment Trends February 2020 Managed Accounts Report survey of 799 financial planners found advisers saved an average of 13 hours a week using managed accounts - time that could be used with clients, focusing on their specific goals, needs and strategies.
This time saving comes from the automatic implementation of portfolio changes and rebalance instructions, which ensures client portfolios are kept up to date, without the need for additional paperwork, ROAs or client signatures, saving time and the chance of unnecessary costly delays.
In comparison, although traditional model portfolios may provide the diversified managed investment structure advisers and their clients are looking for, they lack the implementation efficiencies that can be gained through managed portfolios.
the content of their article was sourced from the HUB24 paper: Measuring the cost of delay.
