Ensuring suitable levels of efficiency – with science!
Author: Paul Hogg, 8AM Global
I have recently been reading Vaclav Smil’s book ‘How the World Really Works: A Scientist’s Guide to Our Past, Present and Future’ where Vaclav outlines ways readers can understand facts, before attempting to tackle problems.
He talks of a “comprehension gap” or “technological alienation” where superficial engagement with tools, solutions and technology breeds system fragility.
Why do I mention this? – all will become clear!
Some context…
The FCA have recently published their ongoing services review, which suggested that the majority of adviser firms are meeting the ongoing suitability requirements. Of the sample cases looked at by the regulator, overall, 83% of clients received a review, while 15% of clients did not engage.
Some examples of good practice were highlighted as;
- Ensuring that clients’ circumstances, objectives and values still matched the ongoing plan.
- Risk profile reviews, ongoing charge and performance monitoring and contextualisation of existing investments and structures were reviewed and recorded.
So, we know that “good” requires a sensible level of data provision, good tooling and an intrinsic understanding of what information matters to help clients contextualise.
So, how does this relate to Vaclav Smil?
I believe that Vaclav’s ideas can relate to the challenges of advisers when moving through a crowded MPS and multi-asset marketplace. Put more simply, how do advisers understand the details of their recommended investment solution, and furthermore are providers being sufficiently transparent?
The Vaclav suggested the idea that companies such as 8AM Global challenge the status quo, more specifically in our case; the pitfalls of monitoring the success or failure of traditional MPS solutions. His theory then naturally leads to the question that in our scenario, do advisers have the sufficient data to correctly assess the challenges they are facing and therefore implement the correct solutions for their clients.
Why 8AM AQ MPS ?
We understand the strengths and weaknesses of human investment managers, so we developed a strategy that leverages their strengths and mitigates their weaknesses.
The objective of our AQ Classic range, is to offer consistent relative return, driven by data, to manage carefully relative active risk and to reduce human bias from the decision-making process. We believe this objective is best achieved through a robust fund selection and asset allocation framework that provides clear, evidence-based metrics for all our decision-making.
According to platform providers Nucleus, advisers using tech-driven reporting tools ‘save 8 hours monthly on client communication’.
When you partner with 8AM, we ensure you’re always prepared for client meetings with clear, easy-to-access, reporting that explains every portfolio tweak and position in plain English. We shun the often opaque and inscrutable reporting of other investment houses and we make life easy for you by using technology to produce a clear rationale for our decisions that you and your clients will engage with.
Plus, as a dedicated MPS business, you have an investment team that is available directly to you for commentary, data, context and client meetings.
Interested in finding out more about how we can help?
This content is intended for financial professionals only. These are the author’s views at the time of writing and may be subject to change. This content is not intended to provide the basis for any investment advice or recommendation. Any forecasts, figures, opinions, tools, strategies, data, or investment techniques are included for information purposes only.
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