22
OFFSHORE IN VESTING SPECIAL
30 September 2017
WARNING! ARE YOUR CLIENT PORTFOLIOS A TICKING TIME BOMB?
A
s an independent Discretionary Fund Manager (DFM), MitonOptimal has been working with and alongside IFAs/ trustees for the best part of two decades and both professions face increasingly common issues. It is evident to us that the old ways of doing business are changing, globally, and without exception. In fact, a growing number of traditional institutions no longer accept clients from jurisdictions perceived to be higher risk and increasingly refuse to open bank accounts for any form of structure. We have seen that pace of change increase significantly over the past few years, depending on your jurisdiction, with FATCA, CRS, BEPS, GDPR, MIFID II, RDR and Registration of Beneficial Ownership to name just a few, overwhelming IFAs/trustees with administrative workloads and regulatory requirements. In this atmosphere, it is easy for the management of portfolios to be inadvertently nudged down an IFA/trustee’s priorities list in many instances. Past decisions and inertia may have an adverse impact on portfolios For IFAs/fiduciary professionals, ensuring that assets and strategies stay aligned with a client’s/trust’s investment policy statement should be a straightforward process. However, a client’s, settlor’s and/or beneficiaries’ personal preference, a good sales pitch from a product provider, or the search for yield can lead to decisions that potentially shift the dynamics of a client portfolio away from the original investment policy statement. From our own experience, when conducting initial portfolio reviews for IFAs/trustees (a major part of our DFM service offering), we are seeing an increasing number of portfolios that either no longer match the original investment mandate, or have had the same asset allocation since inception, sometimes going back decades.
There can be a number of possible reasons for this, especially when an IFA/ trustee inherits a client relationship or large book of clients. However, these substantial challenges also offer an opportunity to better manage the investment aspect of a portfolio/trust, through using income generation and careful stewardship of those a better, faster and smarter portfolio management investments enables an IFA/trustee to maintain a solution, in the form of DFM partnerships. strong relationship with the client/beneficiary. Working with a DFM partner enables the IFA/ For single or larger organisations they trustee to conduct an unbiased and enhanced should provide an insourced investment forensic portfolio management committee or chief analysis, allowing investment officer functions, WORKING WITH A DFM allowing your clients to benefit the IFA/trustee to re-establish a suitable from their investment analytics PARTNER ENABLES risk profile and asset and experience without having to THE IFA TO CONDUCT allocation strategy. appoint an external manager on a That DFM partner will discretionary basis fully. AN UNBIASED AND also take on the dayAs your DFM partner, their ENHANCED FORENSIC to-day responsibility primary focus should be on asset PORTFOLIO ANALYSIS for the investment allocation and portfolio management. decision-making There has also been a paradigm process, enabling IFAs/trustees to further de-risk shift in portfolio management. In particular, the their businesses. The IFA/trustee remains the evolution of investment platforms as a viable primary relationship manager, whilst benefiting alternative to the more traditional approaches now from the full range of research and analysis tools, enables IFAs/trustees to access investment solutions skills and investment experience of the DFM. at the click of a button. Your DFM partner, should be platform agnostic and make their solutions Your DFM partner must understand available to you via various custodians. client circumstances and the IFA/ Over the last few years, there has been Trustee relationship a ground swell of independent IFAs, trust Your DFM partner must have experience in businesses and private client practitioners tailoring portfolio solutions to suit a broad seeking to engage an investment manager who range of client-specific circumstances and understands both their business needs and their investment objectives. client servicing requirements. Most are simply They must understand that wealth preservation trying to do things better/smarter, whilst always is key to securing the legacy of a client, and that looking to avoid that ticking time bomb.
The DFM partner of choice t: 021 689 3579
WWW.MITONOPTIMAL.COM
Investment Manager: MitonOptimal Portfolio Management (Pty) Ltd: Registration No. 2000/000717/07. MitonOptimal Portfolio Management (Pty) Ltd is an authorised Discretionary Financial Services Provider (FSP no. 734). MitonOptimal Portfolio Management (Pty) Ltd complies with all the requirements of the Financial Advisory and Intermediary Services (FAIS) Act (Act 37 Of 2002). The value of investments and the income from them may vary and you may realise less than the sum invested. Past performance is not necessarily a guide to future performance and no guarantees are offered in respect of investment returns and/or capital invested.
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