Managing Investment Portfolios for Clients Chair: David Lee Regional Manager, Fidelity Nigel Whittingham Development Direc...
PFS Conference 2008 Managing Investment Portfolios for clients Nigel Whittingham  -  Development Director Old Broad Street...
<ul><li>We specialise in dedicated qualitative research and analysis of investment funds and products wrappers </li></ul><...
Managing Investment Portfolios for clients
Managing Investment Portfolios for Clients <ul><li>The regulatory environment </li></ul><ul><li>……… is the key driver </li...
Adviser investment expertise <ul><li>3 key segments </li></ul><ul><li>Advisers who outsource portfolio management totally ...
Adviser investment expertise <ul><li>Adviser segments </li></ul>
Regulatory risk by segment for “investment business” Expertise segment Regulatory risk A Advisers who outsource portfolio ...
Outsource solutions to mitigate risk Outsource solutions may also vary with type/size of client Complimentary outsourcing ...
Managing investment portfolios for clients Key Components Ongoing review and advice
Asset allocation
Managing investment portfolios for clients <ul><li>Client profile (investment needs) </li></ul><ul><li>Risk based portfoli...
Strategic asset allocation <ul><li>Long term risk/return profile of investor </li></ul><ul><li>Changes if investor circums...
Tactical asset allocation <ul><li>Shorter term gain driven decisions </li></ul><ul><li>Within long term strategic risk/ret...
Risk based asset allocation models <ul><li>Some key considerations </li></ul><ul><li>Models from different providers will ...
Matching funds to risk based asset allocation model <ul><li>Pitfall </li></ul><ul><li>Asset allocation meets client requir...
Which is the ‘Best Fund’? <ul><li>UK All Companies Sector </li></ul>Artemis UK Special Situations Lazard UK Alpha
Which is the ‘right’ fund?
Selecting appropriate funds to populate the asset allocation model <ul><li>Some key considerations </li></ul><ul><li>The f...
Fund research and selection <ul><li>Outsource solutions </li></ul><ul><li>‘ guided’ versus ‘open’ architecture from provid...
OBSR qualitative fund research – adding value
OBSR qualitative fund research – adding value
OBSR qualitative fund research – adding value
Managing investment portfolios for clients <ul><li>In summary </li></ul><ul><li>Regulatory environment is the key driver <...
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Managing investment portfolios for clients

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  • © Copyright OBSR 2007
  • Managing investment portfolios for clients

    1. 1. Managing Investment Portfolios for Clients Chair: David Lee Regional Manager, Fidelity Nigel Whittingham Development Director, Old Broad Street Research
    2. 2. PFS Conference 2008 Managing Investment Portfolios for clients Nigel Whittingham - Development Director Old Broad Street Research
    3. 3. <ul><li>We specialise in dedicated qualitative research and analysis of investment funds and products wrappers </li></ul><ul><ul><li>Positioned in the market between: Fund Management Groups, Product Providers and Intermediaries </li></ul></ul><ul><ul><li>We provide services to all, but our business models are designed to ensure our independence </li></ul></ul><ul><ul><li>Ultimately all our services are aimed at Advisers and their clients </li></ul></ul>Old Broad Street Research Privately owned, totally independent
    4. 4. Managing Investment Portfolios for clients
    5. 5. Managing Investment Portfolios for Clients <ul><li>The regulatory environment </li></ul><ul><li>……… is the key driver </li></ul><ul><li>TCF </li></ul><ul><li>MiFID </li></ul><ul><li>RDR </li></ul><ul><li>Put the client first </li></ul><ul><li>Recognise your level of expertise </li></ul><ul><li>Outsource to complement skill set </li></ul><ul><li>Ongoing review and advice </li></ul>
    6. 6. Adviser investment expertise <ul><li>3 key segments </li></ul><ul><li>Advisers who outsource portfolio management totally – Financial Planners (A) </li></ul><ul><li>Advisers who want some involvement in portfolio management (B) </li></ul><ul><li>Advisers who want total control over portfolio management – Discretionary Managers (C) </li></ul>Source: Research for a major investment manager and a major life and pensions provider
    7. 7. Adviser investment expertise <ul><li>Adviser segments </li></ul>
    8. 8. 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 <ul><li>Mismatch client needs (risk profile) to solution </li></ul><ul><li>Getting the asset allocation wrong </li></ul><ul><li>Selecting inappropriate funds </li></ul><ul><li>(HIGHER RISK) </li></ul>C Advisers who want total control over portfolio <ul><li>Mismatch client needs (risk profile) to solution </li></ul><ul><li>Getting the asset allocation wrong </li></ul><ul><li>Selecting inappropriate funds </li></ul><ul><li>(HIGHER RISK) </li></ul>
    9. 9. Outsource solutions to mitigate risk Outsource solutions may also vary with type/size of client Complimentary outsourcing will probably reduce Capital Adequacy and P.I. Retail Distribution Review 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 Funds
    10. 10. Managing investment portfolios for clients Key Components Ongoing review and advice
    11. 11. Asset allocation
    12. 12. Managing investment portfolios for clients <ul><li>Client profile (investment needs) </li></ul><ul><li>Risk based portfolio – Long term, strategic? </li></ul><ul><li>Or </li></ul><ul><li>Pure ‘performance’ based portfolio – Shorter term, tactical? </li></ul>Fundamental to client expectations Determines whether risk based asset allocation model is an appropriate solution
    13. 13. Strategic asset allocation <ul><li>Long term risk/return profile of investor </li></ul><ul><li>Changes if investor circumstances change </li></ul>Risk Risk Averse Investor Risk Tolerant Investor
    14. 14. Tactical asset allocation <ul><li>Shorter term gain driven decisions </li></ul><ul><li>Within long term strategic risk/return profile </li></ul>
    15. 15. Risk based asset allocation models <ul><li>Some key considerations </li></ul><ul><li>Models from different providers will give different solutions for the same client profile </li></ul><ul><li>Does the model include a tactical asset allocation overlay? </li></ul><ul><li>Some appear more tactical than strategic and long term </li></ul><ul><li>Adviser must understand how the chosen model works </li></ul><ul><li>Chosen model must become central to adviser’s TCF regime </li></ul>
    16. 16. Matching funds to risk based asset allocation model <ul><li>Pitfall </li></ul><ul><li>Asset allocation meets client requirement but wrong type of funds selected </li></ul><ul><li>Results </li></ul><ul><li>Asset allocation benefit negated </li></ul><ul><li>Client’s expectations not met </li></ul>
    17. 17. Which is the ‘Best Fund’? <ul><li>UK All Companies Sector </li></ul>Artemis UK Special Situations Lazard UK Alpha
    18. 18. Which is the ‘right’ fund?
    19. 19. Selecting appropriate funds to populate the asset allocation model <ul><li>Some key considerations </li></ul><ul><li>The future is more important than the past </li></ul><ul><li>Understanding when a fund is likely to outperform </li></ul><ul><li>A full, in depth understanding of selected funds </li></ul><ul><li>Regular reviews with the fund manager </li></ul><ul><li>QUALITATIVE FUND RESEARCH </li></ul>Expertise and time is Key
    20. 20. Fund research and selection <ul><li>Outsource solutions </li></ul><ul><li>‘ guided’ versus ‘open’ architecture from provider </li></ul><ul><li>Investment driven </li></ul><ul><li>Fund panels </li></ul><ul><li>Qualitative fund research specialist </li></ul>
    21. 21. OBSR qualitative fund research – adding value
    22. 22. OBSR qualitative fund research – adding value
    23. 23. OBSR qualitative fund research – adding value
    24. 24. Managing investment portfolios for clients <ul><li>In summary </li></ul><ul><li>Regulatory environment is the key driver </li></ul><ul><li>Outsource to compliment skill set </li></ul><ul><li>Multi-manager, asset allocation models and professional fund research are outsource options </li></ul><ul><li>Embed your outsource solutions within your TCF regime </li></ul>
    25. 25. In-depth. Informed. Independent.
    26. 26. Thanks to all our sponsors

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