Many of my posts pertain to the markets and the economy. I have my rants and raves about this or that; from the direction of interest rates and federal reserve policy, to stock market volatility—all the fun, opinionated aspects of having a blog. This post, I’d like to highlight our use of technology and provide a few technology-driven solutions to client-specific needs.
Within the firm, our service offering continues to evolve. The needs of our clients drive our desire for continuous improvement. The efficiencies that technology delivers, gives us a unique competitive advantage and allows our firm to provide services at a reasonable cost across multiple brokerage and custodial platforms. Let me provide a couple of examples.
Client Need 1: I need help managing my retirement accounts provided through my employer?
Clients understand that our primary custodians for housing and managing client assets are Schwab and Fidelity—it’s where their assets are held. We provide investment advisory services to their brokerage accounts, IRAs, and certain types of trust accounts. Typically, we would only provide our reporting services to the accounts we managed, leaving most qualified plan accounts such as a 401k, 403b, 457, variable annuities and restricted stock awards left out of the fold from an advisory standpoint. Times have indeed changed and technology allows our firm to aggregate, manage and provide comprehensive advisory reporting on client assets that are “held away” at other firms. This means those accounts that are not-managed, (what we call “self-directed”) or not part of a complete investment strategy, can be brought in to our advisory services platform and included in our comprehensive advisory relationship.
How it works.
With the appropriate client permissions in place, our service provider gathers the login credentials for each client account that is “held away.” Then our portfolio management system securely and safely gathers account data for importation. Once “held away” accounts are in our system we can begin the process of building a complete portfolio that is appropriate for clients individual preferences, risk tolerance and time horizon. Adjustments to a client’s Investment Policy Statement (the “blue print” and process for how assets are managed) will then be updated and maintained. We take on the responsibility of monitoring investment managers, changes to the investment lineup, trading and rebalancing of the account—the same duties and tasks we would customarily provide.
What is the advantage?
It’s no secret that employees that participate in employer-provided retirement plans have little or no access to specific and individually tailored investment and retirement planning advice. Employers and plan providers do their best to provide a minimal amount of information but the end result is employees making a minimum informed decision about their retirement accounts. Now, our client relationships will have the confidence that all of their brokerage and retirement accounts can be managed for optimum results. It provides a confidence to clients knowing that all investment assets are being managed consistently, cost-effectively and thoughtfully—no matter where the assets are held.
Client Need 2: Account Aggregation and Performance Reporting for Multiple Advisors/Managers
There are many relationships where our firm is one of several investment advisors/managers in a client’s overall portfolio. A client in this situation could be a foundation, a trust, a qualified plan or simply a high-net worth individual. Each particular investment manager plays a specific role in the portfolio. They may manage the fixed income portion or represent the passive (index fund) investments of a portfolio. There are several administrative challenges that these types of clients face. One of the greatest challenges is aggregating the individual accounts/managers into one consolidated set of reports for review and management. Traditionally, one advisor is selected for this task and the role is fraught with expense, a lack of timeliness and (in general) inaccuracies in reporting. Ideally, this is a level of reporting that would provide a greater degree of transparency, proper performance measurement and portfolio detail far better than the usual quarterly brokerage statement. While this service offering is not new, it’s traditionally reserved for institutional-based clients.
Comprehensive Advisory Reporting
The solutions we that can provide is an accurate and thorough reporting for all managers at an individual and at a consolidated view with daily reconciliation. Also, we provide a web portal that a client can conveniently access. This means that critical portfolio data can be immediately accessible to the decision-makers: the investment committee, a board at-large or the hands-on, individual high-net worth investor. Depending on the level of service a client desires; we can act as an investment fiduciary and provide an advisory role, or simply provide a comprehensive reporting role and report on an as-needed basis.
Client demand has prompted our firm to offer a more complete service offering. It has always been a goal of mine to maintain a close-knit, boutique-style advisory firm with all the institutional capabilities of a much larger firm. I like to think of our capabilities as “quarterbacking” for the team. A leadership role where we help clients maintain existing advisory relationships, build new relationships with our firm and work together as a team.
My friends thank you for your ongoing support, trust, confidence and feedback.
Peace and prosperity,
Matthew D. Peck
Client Advisor & Partner
Amicus Financial Advisors, LLC
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