Up until then they had been managing investments in-house, selecting and managing tailored portfolios. They were comfortable with the process but realised rebalancing was an issue because they didn’t have the discretionary rights to do this and not all clients would respond to their requests to make changes. As a consequence, they felt the returns they were getting for their clients could have been better. They researched applying for discretionary rights but found the costs prohibitive.
One of the reasons they had decided to manage their own investments was their poor opinion of traditional DFMs. They had come across a number of these due to clients already having investments with them and they weren’t impressed with what they saw.
As Ed says, “We struggled to see how the traditional DFMs delivered value for money. Often clients were confused about what they were getting and exactly how much it cost. When we’ve analysed the portfolios to see how the investments stacked up against our clients’ risk profiles, we were alarmed to find these often didn’t correlate. The bottom line was we felt we could do a lot better.”
“A big turning point for us was when we discovered PortfolioMetrix, or PMX as we refer to them. There’s nothing ‘old school’ about the people or their service and we’ve been enormously impressed with what they offer.
“Working with PMX is like having a highly qualified (they have 4 CFA Charterholders) in-house investment team who are always available to discuss any queries or requirements we have.
“Rebalancing worries are now a thing of the past as our clients’ portfolios are updated and rebalanced when required without us getting involved. We also get excellent quarterly reports which we use to keep clients updated with what’s been happening across the investment landscape.
“We also find their in-depth risk analysis tools invaluable as they make the process of understanding the clients’ willingness and ability to take risk highly intuitive. Their behavioural finance tool is excellent, measuring more about a client’s financial personality than any other attitude to risk tool we’ve seen before. Plus, they recently released a capacity for loss tool that is far beyond a regulatory tick-box exercise. It actually informs and educates us and our clients about what could happen if they miss their targets due to adverse market conditions, all of which helps build trust and, ultimately, keep our clients loyal to us.
“All-in-all we’re really happy with how PMX is helping us drive our business forward. The time savings we’ve made combined with the investment benefits for our clients adds up to great value for money and we look forward to working with the team as they continue to expand their offering.”