It’s All About Your Approach — Creating A Differentiated Client Investment Experience

The array of investment options available to Advisory firms today is virtually limitless: stocks, bonds, mutual funds, pool funds, hedge products, structured products, private equity, income trusts and commodities.  In Canada alone, there are more than 5,500 mutual funds!1 To simplify the delivery of this vast array of investment solutions to their clients, Advisory firms are increasingly shifting their offerings towards managed asset programs that contain a prudently structured set of discretionarily managed investments with the ability to be customized for each client situation.In our experience, though, the challenge that many Advisory firms face is that they are often seeking to bring investment products and managed solutions to their clients that are unique, and in some cases, restricted to only their firm. Although it’s a noble goal to attempt to “build a fence” around your product and solutions offerings, the reality is that the world is awash in investment product, and with the globalization of the capital markets and the advances in technology over the past decade, we believe that it’s extremely challenging for Advisory firms to define their competitive advantage by product or solutions alone. Clearly, high quality investment products and managed asset solutions are critical to an Advisory firm’s existence but we must now view these offerings as “table stakes”.

Given this view, what is it then, that creates differentiation and a unique client investment experience? Although there are many elements that go into the successful “client experience” – quality service & support, solid investment solutions, timely reporting & communications – we believe that a core element of a differentiated client experience for Advisors is all about meeting client needs. The following quote, which is targeted toward High Net Worth Investors but equally applicable across all spectrums of private wealth, summarizes our beliefs:

 

“As wealth management firms increasingly compete for the same High Net Worth investors, and the clients themselves become more demanding, the pressure is on firms to understand the essence of client needs in existing and growth markets, even if they have already developed an accurate read on High Net Worth Investors in their established markets. Without this insight, firms will find it difficult to develop a distinguishing proposition.”

 

World Wealth Report 2008, Capgemini/Merrill Lynch

In our experience, too many Advisors spend far too much time trying to convince clients to invest with them based upon the performance merits of their firm’s investment solutions instead of focusing upon what really matters — How do they construct tailored portfolio solutions for their clients that help them satisfy their various investment needs?

Given this perspective, we have written an article on this approach in order to provide a review of a set of practices and disciplines that we’ve used for years with our own clients as well as working with successful Advisors. It’s called the “Portfolio Approach”.  

1 Dan Hallett & Associates Inc. November 2008.