Implement the investment plan for your client

This video tutorial highlights the key elements that will help you implement your investment plan successfully.


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Now, with a clearly articulated plan in place and a portfolio constructed, the theory ends – it’s time to start investing. 

Cost efficiency and the best client outcome require a careful balancing act when making implementation decisions. Cheapest isn’t always best, and both your business interests and client outcome should be satisfied for an implementation process that’s sustainable.

There are three key topics that successful fee-based advisers keep in mind when attempting to keep this balance:

  • Outsourcing vs. Do It Yourself
  • Managing risk for the client and the business.
  • Systemising portfolio management based on your Statement of Investment Principles.

Outsourcing or DIY? Which is best for you and your business? Advisers are responsible for everything the outsource provider does, as this is part of the advisory service.

Can your outsource partners deliver on your service promises and sustain the level of quality that your clients expect?

Successful practices tend only to outsource specialist services that they couldn’t do with excellence in house – such as legal advice for example. So if outsourcing isn’t any better than you at something, why do it?

Managing risk all depends on having consistent client outcomes no matter who the individual adviser is.

Compliance and risk can seem daunting, especially as you implement systems and controls as part of your responsibilities.

However, it’s vital to staying compliant, thus building trust and ensuring the sustainability of your business.

Having a robust risk management system in place can also be a powerful selling point, as clients like knowing that their adviser is working hard to protect them.

First, identify each financial or reputational risk point. Then detail what risk mitigation steps you’d take to protect against them. This might include dual sign-off of any asset purchases, to make sure they match the client’s IPS. 

Systemising the non-negotiable items, like testing performance against the risk parameters as laid out in the client IPS for example, should be automatic. 

For example, make sure you understand exactly how an asset allocation tool works and why it generates a given outcome. If the outcome is flawed this will prove problematic going forward.

Implementation questions boil down to decisions about in-house IT systems and third-party services, such as platforms. In this world there’s no holy grail – just what achieves an appropriate balance between client outcomes and your costs.

Once you have a plan that your client agrees with, it’s time to decide which systems or platforms you need to implement it. Successful firms let their client proposition drive this choice, not vice versa. 

Choosing a system or platform centres on ensuring that you only make promises you can keep and that your system or platform supports keeping those promises. In order to be sustainable any decision must include both client and business benefits in your decision. 

Find a mix of as many necessary systems or platforms that favours both your client and your business. Remember that each platform means training and fixed implementation costs regardless of how much or little you use it.

In order to implement fully, you may need to have access to all the relevant funds and wrappers. In a post-RDR world you may also need to demonstrate a ‘whole of market’ examination.

Cutting system costs only in the interest of saving probably isn’t sustainable. Successful firms always balance costs against a successful client outcome.

Does your system provide all the relevant risk controls and management information that you need?

Have you agreed with your client that they’ll have direct access to monitoring their investments? If you have, make sure your system supports this function.

Does the chosen system balance the needs of servicing and sales? Sales are vital, but keeping your client promise through robust servicing is more likely to produce a relationship where the client is willing to pay for your service in the long term.

In summary, successful practices know that every implementation decision made should aim to keep the balance between cost efficiency and the best possible client outcome.

Investment risk information:

The value of investments, and the income from them, may fall or rise and investors may get back less than they invested. Past performance is not a reliable indicator of future results.

Other important information:

This video was produced by Vanguard Asset Management, Ltd. It is for educational purposes only and is not a recommendation or solicitation to buy or sell investments.

If this is to be used on third party websites for an audience of professional investors as the submission suggests I would also include the for professional investors disclaimer at the top.

Issued by Vanguard Asset Management, Limited which is authorised and regulated in the UK by the Financial Conduct Authority.

© 2018 Vanguard Asset Management, Limited. All rights reserved.