As a part of our WealthTech Insight Series (WTIS) and in partnership with Financial Simplicity and IAWMC, last month we published a new whitepaper titled: Managing Model Portfolios On Multiple Platforms. The whitepaper was informed by a recent discussion between the UK Discretionary Fund Managers (DFMs) led by Financial Simplicity, which focused on the challenges of managing model portfolios on multiple platforms. Below is an extracted foreword by Stuart Holdsworth, CEO of Financial Simplicity.
The past decade has witnessed an extraordinary expansion in the Model Portfolio Service (MPS) solutions landscape, both in the UK and internationally. This surge in growth, spurred by the increasingly compelling need for efficient investment selection and asset allocation, has been fundamental in fostering process efficiencies, enhancing risk controls, and shaping the trajectory of ongoing investor relationships through the lens of continuous updates and rebalancing.
Yet, along with this growth has come an intricate web of complexities. The realm of MPS and model portfolio provision has evolved far beyond its initial simplicity. Today, it embraces bespoke model portfolio programs tailored to specific advisers or advisory groups. It also grapples with a multiplying number of platforms, each demanding a unique model portfolio variant.
This burgeoning complexity, twinned with the growing values of portfolios under MPS solutions, necessitates a systematic approach. Organisations are compelled to usher in systemisation and methodical procedures to counter potential risks and bolster operational efficiencies. However, the pursuit of these system improvements takes us into uncharted territory, as the required tools diverge from traditional institutional asset management systems and portfolio trading systems.
In the face of this transformation, a substantial part of the necessary systems is found in spreadsheets and office automation tools, often riddled with unmonitored logic, manual processing, and inherent risks of errors.
We envision a future where Discretionary Fund Managers (DFM) and asset managers harness our portfolio control systems to deliver their investment expertise to their specific audiences and platforms seamlessly. They can rapidly generate model portfolio variants, and, as the platform infrastructure evolves, automate the dissemination of these model portfolios and updates at the click of a button. Over time, this will include also the tracking and monitoring of the platform implementation of model portfolios to investor accounts.
Access the research and key findings by reading the full whitepaper here
About the research
The WealthTech Insight Series
This research is part of The Wealth Mosaic’s WealthTech Insight Series (WTIS), an ongoing and developing research process mixing online surveys and interviews. It focuses exclusively on technology in the wealth management sector across the world. Rather than a one-off research process, the WTIS will seek to build an ongoing program of research among wealth managers of different types across the world on a broad range of technology and related topics, building up an aggregated knowledge base of both qualitative views and perspectives as well as quantitative data points.
Partners in research
Financial Simplicity
Financial Simplicity is a global specialist in portfolio control systems. We help wealth and investment managers achieve better experiences and business through the provision of a specialist digital platform. The portfolio co-pilot control systems in our platform allow our clients to deliver their investment propositions on a fully personalised and bespoke basis at scale. We believe this lies at the core of what these groups need to achieve in order to maintain their business and grow within acceptable risk parameters.
How do we do this? We combine an award-winning platform, machine-learned algorithmic IP, and the skills to help investment and wealth management firms understand the business improvement opportunities and then teach them how to deploy these techniques within their business. Find out more at www.financialsimplicity.com
IAWMC
IAWMC is a niche management consulting firm providing services to wealth managers, private banks, family offices, asset managers, software vendors and service providers such as third-party administration firms. We differentiate ourselves from our peers and competitors by providing pragmatic and cost-effective consulting services to our clients by utilising our broad and deep knowledge of the financial services industry in which we operate. Find out more at www.iawmc.com
