Why IFAs should monitor client portfolios regularly

Why IFAs should monitor client portfolios regularly

Trump, Brexit and other global events should precipitate close monitoring of client portfolios and better client support, advisers have said.

According to advisers such as Danny Cox, chartered financial planner for Hargreaves Lansdown, advisers running portfolios for clients need to make sure portfolios are monitored and better client support is given during times of geopolitical upheaval.

He said: "Advisers should ensure their clients have the right support when they need it and manage their expectations sufficiently through the lumps and bumps and this won’t just be about rebalancing a portfolio."

Article continues after advert

Mr Cox said the most important job of an adviser was to "help a client understand their goals and objectives, and the amount of capital and income they will need over their lifetime to achieve them.

"Among other things, the review fee covers the costs of a reassessment of where the investor is against their plan."

Colin Parkin, managing director of Ample Financial Services and member of the Million-Dollar Round Table, believes it is important to take an active role in managing a diversified portfolio, taking account of significant events such as Brexit and the US elections.

Earlier this year, he had successfully positioned his clients defensively ahead of the Brexit vote, saving them from the pain of a falling pound and problems with daily dealing property funds, and in the run-up to the Presidential Election in the US, he advised clients to move out of dollar holdings.

When the outcome was announced, Mr Parkin's client portfolios did not have high exposure to dollar-denominated securities, so they were "positioned defensively" against the falls in the USD which hit the headlines on 9 November.

In a video interview with FTAdviser, Mark Fawcett, chief investment officer for the National Employment Savings Trust, said long-term investment portfolios should be monitored.

He explained: "It is important to vary the asset allocation through time. A good investment strategy is not a 'set and forget one'.

"Diversification is good but you need to vary the strategy according to market conditions."

However, Mr Cox cautioned against advisers making immediate, swingeing changes to a portfolio. He said: "It’s too easy to get drawn into short-term decision making.

"An adviser worth his salt will be taking a longer-term view with clients, recommending they hold plenty of cash, take a longer-term view with their portfolio based on the amount of risk they need to take and ignore the noise and volatility around macro events such as these."