managing investment portfolios for clients
DESCRIPTION
TRANSCRIPT
![Page 1: Managing investment portfolios for clients](https://reader036.vdocuments.us/reader036/viewer/2022062511/54c34a174a7959e84d8b4704/html5/thumbnails/1.jpg)
Managing Investment Portfolios for Clients
Chair: David LeeRegional Manager, Fidelity
Nigel WhittinghamDevelopment Director, Old Broad Street Research
![Page 2: Managing investment portfolios for clients](https://reader036.vdocuments.us/reader036/viewer/2022062511/54c34a174a7959e84d8b4704/html5/thumbnails/2.jpg)
In-depth. Informed. Independent.
PFS Conference 2008
Managing Investment Portfolios for clients
Nigel Whittingham - Development Director
Old Broad Street Research
![Page 3: Managing investment portfolios for clients](https://reader036.vdocuments.us/reader036/viewer/2022062511/54c34a174a7959e84d8b4704/html5/thumbnails/3.jpg)
In-depth. Informed. Independent.
We specialise in dedicated qualitative research and analysis of investment funds and products wrappers
Positioned in the market between: Fund Management Groups, Product Providers and Intermediaries
We provide services to all, but our business models are designed to ensure our independence
Ultimately all our services are aimed at Advisers and their clients
Privately owned, totally independentPrivately owned, totally independent
Old Broad Street Research
![Page 4: Managing investment portfolios for clients](https://reader036.vdocuments.us/reader036/viewer/2022062511/54c34a174a7959e84d8b4704/html5/thumbnails/4.jpg)
In-depth. Informed. Independent.
Managing Investment Portfolios for clients
![Page 5: Managing investment portfolios for clients](https://reader036.vdocuments.us/reader036/viewer/2022062511/54c34a174a7959e84d8b4704/html5/thumbnails/5.jpg)
In-depth. Informed. Independent.
Managing Investment Portfolios for Clients
The regulatory environment
………is the key driver TCF
MiFID
RDR
Put the client first Recognise your level of expertise Outsource to complement skill set Ongoing review and advice
Put the client first Recognise your level of expertise Outsource to complement skill set Ongoing review and advice
![Page 6: Managing investment portfolios for clients](https://reader036.vdocuments.us/reader036/viewer/2022062511/54c34a174a7959e84d8b4704/html5/thumbnails/6.jpg)
In-depth. Informed. Independent.
Adviser investment expertise
3 key segments Advisers who outsource portfolio management totally –
Financial Planners (A)
Advisers who want some involvement in portfolio management (B)
Advisers who want total control over portfolio management – Discretionary Managers (C)
Source: Research for a major investment manager and a major life and pensions provider
![Page 7: Managing investment portfolios for clients](https://reader036.vdocuments.us/reader036/viewer/2022062511/54c34a174a7959e84d8b4704/html5/thumbnails/7.jpg)
In-depth. Informed. Independent.
Adviser investment expertise
Adviser segments
![Page 8: Managing investment portfolios for clients](https://reader036.vdocuments.us/reader036/viewer/2022062511/54c34a174a7959e84d8b4704/html5/thumbnails/8.jpg)
In-depth. Informed. Independent.
Regulatory risk by segment for “investment business”
Expertise segment
Regulatory risk
A Advisers who outsource portfolio management totally
Mismatch client needs (risk profile) with selected “managed solution” (LOWER RISK)
B Advisers who want some involvement in portfolio management
• Mismatch client needs (risk profile) to solution
• Getting the asset allocation wrong• Selecting inappropriate funds(HIGHER RISK)
C Advisers who want total control over portfolio
• Mismatch client needs (risk profile) to solution
• Getting the asset allocation wrong• Selecting inappropriate funds(HIGHER RISK)
![Page 9: Managing investment portfolios for clients](https://reader036.vdocuments.us/reader036/viewer/2022062511/54c34a174a7959e84d8b4704/html5/thumbnails/9.jpg)
In-depth. Informed. Independent.
Outsource solutions to mitigate risk
Expertise segment
Outsource solution
A Advisers who outsource portfolio management totally
Multi-manager funds, discretionary manager
B Advisers who want some involvement in portfolio management
Asset Allocation Tool
“Guided” Range of FundsOutsource solutions may also vary with type/size of client
Complimentary outsourcing will probably reduce
Capital Adequacy and P.I.
Retail Distribution Review
Complimentary outsourcing will probably reduce
Capital Adequacy and P.I.
Retail Distribution Review
![Page 10: Managing investment portfolios for clients](https://reader036.vdocuments.us/reader036/viewer/2022062511/54c34a174a7959e84d8b4704/html5/thumbnails/10.jpg)
In-depth. Informed. Independent.
Managing investment portfolios for clients
Key Components
Ongoing review and advice
![Page 11: Managing investment portfolios for clients](https://reader036.vdocuments.us/reader036/viewer/2022062511/54c34a174a7959e84d8b4704/html5/thumbnails/11.jpg)
In-depth. Informed. Independent.
Asset allocation
![Page 12: Managing investment portfolios for clients](https://reader036.vdocuments.us/reader036/viewer/2022062511/54c34a174a7959e84d8b4704/html5/thumbnails/12.jpg)
In-depth. Informed. Independent.
Managing investment portfolios for clients
Client profile (investment needs) Risk based portfolio – Long term, strategic?
Or
Pure ‘performance’ based portfolio – Shorter term, tactical?
Fundamental to client expectationsFundamental to client expectations
Determines whether risk based asset allocation model is an appropriate solution
Determines whether risk based asset allocation model is an appropriate solution
![Page 13: Managing investment portfolios for clients](https://reader036.vdocuments.us/reader036/viewer/2022062511/54c34a174a7959e84d8b4704/html5/thumbnails/13.jpg)
In-depth. Informed. Independent.
Strategic asset allocation
Long term risk/return profile of investor
Changes if investor circumstances change
Risk
Risk Averse Investor
Risk Tolerant Investor
![Page 14: Managing investment portfolios for clients](https://reader036.vdocuments.us/reader036/viewer/2022062511/54c34a174a7959e84d8b4704/html5/thumbnails/14.jpg)
In-depth. Informed. Independent.
Tactical asset allocation
Shorter term gain driven decisions
Within long term strategic risk/return profile
![Page 15: Managing investment portfolios for clients](https://reader036.vdocuments.us/reader036/viewer/2022062511/54c34a174a7959e84d8b4704/html5/thumbnails/15.jpg)
In-depth. Informed. Independent.
Risk based asset allocation models
Some key considerations Models from different providers will give different solutions for
the same client profile
Does the model include a tactical asset allocation overlay?
Some appear more tactical than strategic and long term
Adviser must understand how the chosen model works
Chosen model must become central to adviser’s TCF regime
![Page 16: Managing investment portfolios for clients](https://reader036.vdocuments.us/reader036/viewer/2022062511/54c34a174a7959e84d8b4704/html5/thumbnails/16.jpg)
In-depth. Informed. Independent.
Matching funds to risk based asset allocation model
Pitfall
Asset allocation meets client requirement but wrong type of funds selected
Results
Asset allocation benefit negated
Client’s expectations not met
![Page 17: Managing investment portfolios for clients](https://reader036.vdocuments.us/reader036/viewer/2022062511/54c34a174a7959e84d8b4704/html5/thumbnails/17.jpg)
In-depth. Informed. Independent.
Which is the ‘Best Fund’?
UK All Companies Sector
Artemis UK Special Situations
Lazard UK Alpha
![Page 18: Managing investment portfolios for clients](https://reader036.vdocuments.us/reader036/viewer/2022062511/54c34a174a7959e84d8b4704/html5/thumbnails/18.jpg)
In-depth. Informed. Independent.
Which is the ‘right’ fund?
Artemis UK Special Situations (MF) Lazard UK Alpha Retail Inc (MF) FTSE All Share TR (IN:IN)Relative to
Percentage Growth Total Return, Tax UK Net, In GBP
7 Years From 28/09/2001 To 30/09/2008
Perc
en
tag
e G
row
th
-10
0
10
20
30
40
50
60
70
80
90
100
110
01/2002 07/2002 01/2003 07/2003 01/2004 07/2004 01/2005 07/2005 01/2006 07/2006 01/2007 07/2007 01/2008
75.5
1.8
User may have modif ied the original chart and axis titles provided by Lipper.
![Page 19: Managing investment portfolios for clients](https://reader036.vdocuments.us/reader036/viewer/2022062511/54c34a174a7959e84d8b4704/html5/thumbnails/19.jpg)
In-depth. Informed. Independent.
Selecting appropriate funds to populate the asset allocation model
Some key considerations The future is more important than the past
Understanding when a fund is likely to outperform
A full, in depth understanding of selected funds
Regular reviews with the fund manager
QUALITATIVE FUND RESEARCH
Expertise and time is KeyExpertise and time is Key
![Page 20: Managing investment portfolios for clients](https://reader036.vdocuments.us/reader036/viewer/2022062511/54c34a174a7959e84d8b4704/html5/thumbnails/20.jpg)
In-depth. Informed. Independent.
Fund research and selection
Outsource solutions ‘guided’ versus ‘open’ architecture from provider
Investment driven
Fund panels
Qualitative fund research specialist
![Page 21: Managing investment portfolios for clients](https://reader036.vdocuments.us/reader036/viewer/2022062511/54c34a174a7959e84d8b4704/html5/thumbnails/21.jpg)
In-depth. Informed. Independent.
OBSR qualitative fund research – adding value
OBSR UK All Companies Sector Average (rated) (MP)FTSE All Share TR (IN)
IMA UK All Companies (IN)LIBOR GBP 3 Months (IN)
Percentage Growth Total Return, Tax UK Net, In GBP
3653 Days From 30/09/1998 To 30/09/2008
Perc
en
tag
e G
row
th
-50
-25
0
25
50
75
100
125
150
175
200
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
e96
50
43
41
User may have modif ied the original chart and axis titles provided by Lipper.
![Page 22: Managing investment portfolios for clients](https://reader036.vdocuments.us/reader036/viewer/2022062511/54c34a174a7959e84d8b4704/html5/thumbnails/22.jpg)
In-depth. Informed. Independent.
OBSR qualitative fund research – adding value
OBSR Europe ex UK Sector Average (rated) (MP)FTSE Europe ex UK TR GBP (IN)
IMA Europe Excluding UK (IN)LIBOR GBP 3 Months (IN)
Percentage Growth Total Return, Tax UK Net, In GBP
3653 Days From 30/09/1998 To 30/09/2008
Perc
en
tag
e G
row
th
-50
-25
0
25
50
75
100
125
150
175
200
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
e131
75
70
50
User may have modif ied the original chart and axis titles provided by Lipper.
![Page 23: Managing investment portfolios for clients](https://reader036.vdocuments.us/reader036/viewer/2022062511/54c34a174a7959e84d8b4704/html5/thumbnails/23.jpg)
In-depth. Informed. Independent.
OBSR qualitative fund research – adding value
OBSR Global Growth Sector Average (Rated) (MP)FTSE World TR GBP (IN)
IMA Global Growth (IN)LIBOR GBP 3 Months (IN)
Percentage Growth Total Return, Tax Default, In GBP
10 Years From 30/09/1998 To 30/09/2008
Perc
en
tag
e G
row
th
-25
0
25
50
75
100
125
150
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
e80
65
56
37
User may have modified the original chart and axis titles provided by Lipper.
![Page 24: Managing investment portfolios for clients](https://reader036.vdocuments.us/reader036/viewer/2022062511/54c34a174a7959e84d8b4704/html5/thumbnails/24.jpg)
In-depth. Informed. Independent.
Managing investment portfolios for clients
In summary Regulatory environment is the key driver
Outsource to compliment skill set
Multi-manager, asset allocation models and professional fund research are outsource options
Embed your outsource solutions within your TCF regime
![Page 25: Managing investment portfolios for clients](https://reader036.vdocuments.us/reader036/viewer/2022062511/54c34a174a7959e84d8b4704/html5/thumbnails/25.jpg)
In-depth. Informed. Independent.
In-depth. Informed. Independent.
![Page 26: Managing investment portfolios for clients](https://reader036.vdocuments.us/reader036/viewer/2022062511/54c34a174a7959e84d8b4704/html5/thumbnails/26.jpg)
Thanks to all our sponsors