Analytical Diaries

Since we are offering managed services most banks still would consider a part of their core capabilities, often we hear the following question:
What on Earth should convince a serious bank to outsource its product selection and investment recommendations?
Obviously we also hold in stock a few answers:

• they might not have (or want) the skills in-house
• they might want to claim a truely quantitative approach
  (and not some mathmatics cooked up with the researcher’s flavor of the month)
• they might enjoy a more effective process (looking at cost, time and client impact)
• they might decide to offer a service previously reserved for a small
  extra paying client segment to all their clients

Let’s have a closer look at these points and consider their feasibility:

(1) A question of skills

Usually the banks who have been in the Private Banking and Wealth Management domain long enough offer discretionary mandates to their top notch clients. These pay extra healthily to have a specialized portfolio manager actively monitoring their positions and deciding what to sell and what to buy, if and when. For the ordinary client nobody takes that effort. That is also why there usually are a lot less portfolio mamagement experts than there are client advisors. In that light it may seem reasonable to rely on a team of specialists to provide portfolio and switch insights and teach your sales staff to become little investment manager.

(2) A question of methods

We use only and purely quantitative measures to provide you with an ideal target asset allocation fit to your product strategy and to the risk profiles of your choice. But we do not dillute this time-tested approach with subjective research opinions and the trendy flavor of the month. Also our historic back-testing shows transparently what the risk and performance would have been like in the past.

(3) What is it also about? Time & Money

Since have chosen the advisory process as our central domain, we have got the skills, the systems and the infrastructure in place to handle a large number of portfolios & clients. This makes the overall solution a lot more cost & time effective than every custom build in-house variant. You can use the time for your core business – which is advising and consulting your client. To understand her needs and objectives, develop a mutually trusted investment strategy and to propose viable product alternatives to implement that strategy. We are only there to ease that process.

(4) Go beyond ordinary

We have learned from many clients that they aim at winning back their clients trust by offering a service beyond the old day to day regular. Offering each and every client an actively managed portfolio might just be that added sign of appreciation.

So if you consider any or all of these points feasible and relevant to you and your clients, we should have a more detailed conversation.

Best Regards
-Tom