Investment Advisors Prove Value Through Customization

If you’re an investment advisor, you’ve probably been busily adapting your business for a rapidly changing world, and you know that’s far from over.

Digital brokerages like Charles Schwab and E-Trade, roboadvisors like Betterment and Wealthfront, and other tech-powered companies have changed the business of managing personal investments.

Investment advisors used to be an indispensable part of the investment process. Investors couldn’t manage their money without one. But now, with algorithmic investing, market event alerts, mobile trading apps and more, investors have many alternatives.

Which is unfortunate, because advisors are still tremendously valuable to individual investors. You go beyond the basics by taking a holistic approach to savings and investments. You create personal relationships with your clients that allows you to better understand risk profiles. And, of course, you aim to provide insightful investment perspectives to your customers.

Investment advisors are investment coaches. People need them. We can all use a little financial coaching. However, it’s become harder for an investment advisor prove value above these fintech alternatives.

But the value’s still there. We know it, and you certainly know it.

Which got us thinking. How can investment advisors demonstrate tangible value in a world where a few button clicks is all it takes to get an investment portfolio?

The key, we’ve found, is customization.

The Power of Financial Customization

Imagine if financial advisors like yourself could build and share investment strategies that are effortlessly customized for clients.

Client needs will be better met, and client concerns would be precisely addressed. This creates more satisfied, engaged, and loyal customers. Time you spend manually administering portfolio management is also freed up so you can deepen relationships and acquire new clients.

But how is that supposed to happen? Glad you asked! We here at Polly Portfolio have taken our experience managing multi-asset strategies for investment banks and hedge funds and developed our Bespoke Customized Investment (BCI) service for financial advice. It does the grunt work of pulling together pertinent client information (from investment objectives to market outlooks to current investments) and a base investment strategy and helps you create a customized proposal, complete with explanations.

Five Dimensions of Client Value

Truly customized investment proposals — the kinds roboadvisors aren’t providing yet — create value for clients in at least five ways:

First, a customized approach, whether it uses BCI or not, allows for more flexible financial planning. Customization helps create an investment strategy that matches a client’s initial financial plan. This helps you the advisor service clients with unique profiles, like business owners, real estate investors, or any other type of client who doesn’t just need a cookie-cutter allocation, expanding your reach and impact.

Second, you can create customized adjustments for existing portfolio holdings. So, if a client of yours has held-away assets through an outside account, you can include the allocation as part of the overall mix. This ensures that client portfolios stay in balance, resulting in no unnecessary trades, allowing you to deliver the best results possible.

Third, customization can automatically rebalance a client account. Through a tool like BCI, it’s possible to individually balance your clients’ portfolios. When an account becomes overexposed, or client circumstances change, automation takes care of it so you don’t have to worry. Your time is better spent elsewhere.

It’s even possible to use customization so that it takes risk profile, investment concerns, and client investment philosophy into account. If, for example, one of your clients is afraid of rising inflation, their portfolio is customized to address that concern. This results in peace of mind and becomes an added benefit that you can offer your clients.

Finally, you can use customization software to help your clients with tax strategy. Embedded capital gains and differing marginal tax rates throw a monkey wrench into managing via model portfolios. A tool like BCI helps by making small adjustments to reduce your clients’ tax burden, and improving post tax returns and client account balances.

One Dimension of Advisor Value

Conversely, we’re only going to give you one reason why BCI is valuable to advisors. Client retention is the first condition of a healthy advisory practice. Especially in the emerging world of fee-based advice, there’s little reason to kill yourself to get new clients if you aren’t keeping the clients you have. And, famously, the top reason clients leave their financial advisors isn’t poor performance — it’s a lack of communication about what the advisor is doing for them.

So how will you have a conversation with your clients that demonstrates your value? BCI empowers you to do just that. It literally generates a customized checklist, leveraging cutting-edge investment logic and modern technology, of the adjustments you have made and can make to optimize an investment plan for them. That allows you to show your clients — every single time you talk to them — the specific, personalized steps you are taking to help them achieve their goals.

Use technology to power your business. Provide customized solutions to customer pain points. Show your client base that you care. Invest in a tool like BCI and do what roboadvisors can’t.


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