Advisers can deepen client relationships with model portfolios

ssga financial advice model portfolios financial advisers State Street Global Advisors Brie Williams Royal Commission RC portfolio management

18 December 2019
| By Jassmyn |
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Financial advisers are keen to enhance the credibility of their business and model portfolios can help advisers spend more time building client relationships, according to State Street Global Advisors (SSGA).

The investment manager’s latest report Model Portfolio Solutions and the Client Experience found that 34% of Australian advisers found earning and maintaining client trust was the biggest challenge when growing their practices.

SSGA head of practice management, Brie Williams, told Money Management she found it interesting that the third most important business goal for Australian advisers was to enhance their businesses credibility in the industry against the back drop of the Royal Commission.

“They want to raise the bar in client experience with the individual investors and families that they serve. In a sea of change like what is happening right now sometimes that type of good message can get lost,” she said.

However, despite the goal of deepening relationships and to acquire more clients advisers said they spent more time on portfolio management (23%) than on client-facing activities (15%) or prospecting new clients (11%).

One-fifth of advisers also cited time management as a challenge for achieving goals thanks to fulfilling compliance and regulatory requirements.

Williams said that outsourcing portfolio management could help advisers who placed high value on bespoke services.

She noted that it was reassuring was that individual investors were not opposed to the idea of their adviser using model portfolio solutions as part of the investment management equation.

Williams said using model portfolios would help advisers find economies of scale as more quality time could be spent adding value to clients by deepening relationships and trust, and deliver on fiduciary responsibilities. The model portfolio could then help the advisers provide comprehensive wealth management services and objective advice.

Williams noted that it was important to identify the right model portfolio provider that could help add value and not every client would be suitable to use a model portfolio. If those that were suitable, advisers could use it to generate economies to scale, mitigate risk and deliver portfolio excellence.

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