Client Profiling (Financial Status and Risk Tolerance)
In order to provide the most suitable financial solution, it is absolutely imperative to know the financial status of the investor. This includes his assets, liabilities, net worth, liquid net worth, total income, current investments and above all, his risk tolerance threshold. The process becomes the basis of all subsequent steps to build the relationship with a client. The essence of “suitability” would be lost without this most important first step.
Financial Planning
After a thorough study of duly completed Client Profile, a proper Financial Planning becomes the next step to give the client a complete road map to achieving his long term as well as short term investment objectives. Imagine a 40-year old investor with little or no life/medical insurance! A situation like this is a glaring missing piece in the overall “puzzle” of financial planning and yet, quite surprisingly, remains unnoticed by many people.
Asset Allocation
Only after a Financial Plan is discussed with an approved by the investor, an appropriate Asset Allocation model designed to meet his financial goals is prepared for further discussion. Asset Allocation is determined upon variety of factors including client-specific needs, his risk profile, macro-economic backdrop, among others. A major portion of the performance of most investment portfolios is attributed to asset allocation.
Portfolio Recommendation / Restructuring
Now that the Asset Allocation matrix is in place, a suitable portfolio is recommended, which could include either a completely new investment plan or a structuring of an existing plan or a combination thereof. In any case, the exercise is always done solely keeping the client, and not any particular product/service, in focus.
Client On-Boarding
Although the first step of building the relationship with the client begins with Client Profiling itself, when the client is still contemplating his immediate and long term financial goals yet the actual process and procedures followed in our system officially gets him on-board. This is when our fiduciary responsibility increases in terms of ensuring accuracy in client data, transactions, reporting and other activities related to client service.
Portfolio Review Process
One of the, if not the, most common concerns voiced by investors generally is the lack of after-sales-service. We have self-mandated the goal of regular Portfolio Review for all our clients. The exercise is not only important for the investor to know the progress of his investments, but also for us to be able to provide a timely recommendation for any rebalancing or restructuring that may be required to upgrade the portfolio.
Product Review Process
Just like the Portfolio Review, we also conduct regular Product Review of different product providers to ensure consistency in their investment strategy, adherence to the mandate, transparency, performance etc. The exercise enables us to fortify our initial portfolio construction and supports any changes we might deem fit as and when warranted.
Back Office Support
The Back Office is the “back bone” of any organization, and a weak back bone is bound to create a hunchback posture in the structure of the organization. Our administration department is well-equipped to service clients from on-boarding to regular review stage as well as interact with the various product/service providers for day-to-day operations. A strong operations team armed with appropriate tools is key to meeting the daily challenges coming our way in this technologically competitive environment and ever-evolving financial markets.
