Monitor progress: Keeping the plan on track

This video tutorial demonstrates how to keep your clients' investment plans running smoothly.


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Keeping the plan running smoothly means regular monitoring and assessments that consider the progress against the clients’ goals and required rate of return. 

This way you’ll know whether to adjust the plan or not.

Demonstrating your expertise offers reassurance to the client, and strengthens the client-adviser relationship.

It’s no accident that successful firms focus a lot of resources on the review process.

Previously, the initial client engagement was considered the most significant event in the adviser-client relationship, and was where commission was earned. 

But thereafter, ‘review’ meant a quick check on client holdings and a chance to uncover further sales opportunities.

Now, best-practice advisers understand that the client will only pay an ongoing fee for a valuable service, i.e. an investment plan that remains on track and continues to progress towards the clients’ goals.

In fact, demonstrating your ongoing service for the fee you charge is now a regulatory requirement.

Rather than just reviewing the portfolio, successful advisers choose to offer a “goal attainment” service, which re-assesses the clients’ goals and ambitions, and adjusts the plan accordingly.

Reviews should be clearly scheduled, and they should form part of the client proposition. 

This ensures that no emotional decisions are made - influenced by current market conditions - which could result in a plan that veers off course. Remember investing is for the long-term.

Over a period of time, any portfolio can drift from its target asset allocation, which can result in a portfolio with risk and return characteristics outside the client profile.

Portfolio rebalancing can keep the target asset allocation on track.

A rebalancing strategy is an important element in the Investor Policy Statement, as it details how often and how much can be rebalanced. The cost of rebalancing can seriously impact returns if done too often!

There are some key aspects to consider when reviewing portfolio goals and clients’ aspirations:

Significant life events - These may require the investment plan to be revisited from scratch, but advisers can show how flexible they are, by adapting to circumstances.

Asset allocation strategy – The adviser should review the portfolio for drift, considering all asset classes and their performance. At the same time they should think about any other asset classes that could be introduced and how these could help the client achieve their goals.

Real vs. actual risk – It’s useful to assess what risk was generated and whether it was within the clients’ risk tolerance.

Costs – Were the costs within the parameters set in the IPS? Was the investment portfolio the most efficient it could possibly be? 

Fund managers - Each individual fund manager should be assessed against the criteria set out in the IPS.

In summary, successful advice practices recognise the value of the review process both in achieving the clients’ goals and in demonstrating their own expertise and value.

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.