3-Step Formula
to Simplify Your Investment Offering

Today’s ever-expanding selection of investment products can sometimes be too much of a good thing for you and your clients. How do you decide which to choose, and how do you combine them to help your clients reach their financial goals?

Streamlining the investment selection process can alleviate some of the pressure on your time, so that you can give more attention to client service and relationship building. Following is a 3-step process for simplifying your product offering and business.


Step #1: Evaluate

Prioritizing the long list of variables you need to consider as you select investments for your clients’ portfolios can be overwhelming. That’s why we recommend a “top-down” approach:

  • Start with an investment philosophy you believe in, and can stick to
  • Next, identify broad asset allocations that match conditions and your client profile
  • Then, tackle diversification of investment vehicles at the sub-asset level

This proactive approach brings confidence and clarity to your choices, while saving you time by excluding products that do not fit your plan. It also provides a rationale that you can share with clients to highlight your strategic thinking, investment expertise and conviction.


Overcoming the 5 Big Investor Challenges in Volatile Markets


Step #2: Declutter

Once you can articulate the how behind managing your clients’ money, the next step is to prune your product choices as needed to reflect your strategy.

Start with the easy wins: cut anything that has fallen short of performance expectations, or is lacking for other reasons. For example, is there a comparable investment for a lower fee? Has a newer product failed to gather enough assets to be sustainable? Can you decrease the number of “orphaned” positions – those held by only one client account?

Two more questions can help you filter out the noise, and leave you with strictly the essentials for building and protecting wealth for your clients:

  1. Does including this product in my clients’ portfolios increase their expected long-term return?
  2. If not, does it reduce risk in their portfolios?

If a product can pass this litmus test, it may be worth holding on to, especially if it is unique and represents the best fit for a desired exposure. There is no right or wrong answer as to how many investments are too many, but remember that simple portfolios have the potential to perform as well as their more elaborate counterparts. Complexity does not necessarily equal quality!


Step #3: Organize

Now that you have pared down on the product side, you have the opportunity to shore up your research capabilities and concentrate on the particulars of what your clients hold and why. Here is where you can really add value as an advisor – devoting sufficient time to thinking about your clients and which investments are most suited to their individual situation based on your extensive knowledge and insights. Investing is inherently complex, but becomes much more straightforward with 40 positions to stay on top of rather than 400.

In scaling back, you may also decide to move away from highly customized portfolios. Using pre-set or model portfolios can lighten the administrative burden of portfolio rebalancing and reporting requirements in a single-holding solution. Whichever route you take, getting organized is about striking a balance between the “keep the lights on” parts of your business, versus activities that will build client relationships and spur your continued growth.

Putting it all together

As you face increased competition, heightened compliance requirements and clients who expect more for less, marshalling your attention and resources appropriately is key. Go through the exercise of examining your business and the work you do for your clients. Like the clutter that finds it way into the rest of our lives, a lot of it may be unnecessary. When you simplify your business and product offerings, your work will be better, your clients will be happier and life will improve. Here’s to a minimalist and profitable 2019!


Overcoming the 5 Big Investor Challenges in Volatile Markets