Portfolio Management Efficiency: When Less Means More

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As a financial adviser, you support your clients in the pursuit of their financial goals. Often, client relationships entail managing the investment portfolio in addition to delivering comprehensive planning. In an industry where customer service and communication are what keep clients loyal, spending too much time on back-office activities can actually damage your client relationships and firm profitability. Considering proper management of client investments is a value-added service and critical to serving your clients, how can you manage your core professional responsibilities while focusing on serving your customers?

The key is simply to spend less time on investment management. How can you spend less time on investment tasks and more time on customer service without sacrificing the quality of your investment services? Two words: process efficiency.

Investment management involves portfolio software and technology, internal processes and your investment service partners. Creating an overall investment management process strategy and building intentional structures within and between your technology, processes and partners can streamline your portfolio management.

Portfolio Software

Investment software functionality and its integration with other practice management software allows you to leverage your productivity, reducing the amount of time spent on research, reporting and documentation. The March/April edition of FPA’s Practice Management Solutions magazine had a great article, “3 Tips for Maximizing Your Portfolio Management Software“, by Rebecca King, that is a worthwhile read. The FPA Research Center recently released a portfolio management software technology report that provides reviews of portfolio software and functionality. Investing in portfolio software that directly serves your portfolio management needs will provide greater returns than software that has all the bells and whistles, but doesn’t integrate with other technology or your internal process.

Internal Processes

There are a multitude of ways to streamline internal investment systems and procedures. Each practice has its own methods and best practices, so successful modification requires customization. One way that we enhance our internal investment processes at IPS is pre-scheduling. We conduct regular in-depth reviews of our investments, at pre-determined times (typically around the quarterly conference call associated with that investment or manager). We perform overall investment reviews at the end of each month, and perform internal market data reports every Friday which allow us to respond quickly should immediate changes need to be made. This enables us focus deeply on our investments while making customer service our core focus.

Practice Partners

Your broker-dealer or RIA likely has an abundance of investment-related resources available to you – you just may not know about them. Call your account representative to ask about what additional resources and services they have available to support your practice. Many offer templates, research, and services that reduce the administrative burden associated with investment management.

When creating or modifying the investment process to create efficiencies and reduce the cost of time and resources, it is best to work with the system and structure as a whole. However, that doesn’t mean you can’t make small or incremental changes that increase your productivity. A great way to look for efficiency and innovate is to always ask: How can I do this better? Is this step in the process necessary? What can make this easier while delivering better quality? Challenge yourself! I know you’re up to the task.

Janelle McMurdie-Kahler
Senior Partner
Independent Portfolio Services, Temecula, Calif.

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