financial services, financial consultant, financial advisor, investments, investment management, management, consulting, investing, investments, assets, financial advice, advice, fee base, fee based, brokerage, commission, stock, stock broker, mutual funds, etf, folio, pmer, steve winks, srconsultant, srconsultant.com
 
     

The Consultant's Toolbox
Investment Products

Quick Toolbox Links:
Professional Development
Process and Technology
Practice Management
Investment Products
Consultant's Toolbox Home Page
Advisor Tools and Resources:
Sponsored by:
We need to do a better job in getting information to advisors so that they can counsel their clients in a more timely manner. PIPODs do this.

Brought to you by PPCA, Inc.
Free Desktop Version of PIPODs Available!
Download desktop PIPODs now.


Buy the latest universes for accurate, timely PIPODs performance rankings now
.

The engagement of one's professional investment and administrative counsel for an on-going advisory fee requires a more disciplined approach to portfolio construction because one is accountable for their investment recommendations, and must address and manage a broad range of investment and administrative values.

One of the values most important to the investor and the consultant is the cost structure of the investment vehicles used as required under Subsection 7 of the UPIA and Subsection 404(a)(1) of ERISA. As a practical business consideration, the investment management consultant is obligated to disclose all fees and charges to include the fee they charge the client for engaging their services and the cost structure of the investment vehicles they use. Thus, the overall fees the client incurs and what the consultant can charge for services is greatly impacted by the embedded cost structure of the investment vehicles used. The higher the cost structure of the investment vehicle, the less latitude the consultant has in pricing their services.

Most importantly, it is what the consultant does with the investment vehicle that adds value, not the investment vehicle in and of itself. Thus, advisors who provide high level advice at the higher end of the market with the most assets and the most discernment, use different investment vehicles than at the lower end of the market where investors will not be as vigilant or hold advisors as accountable. Separately managed accounts, folios, ETFs and hedge funds are the best-in-class investment vehicles for more sophisticated portfolio construction required at the higher end of the market and are particularly well suited for the disclosure requirements of UPIA, ERISA and MPERS. They have a lower cost structure and a more disciplined investment philosophy, are more investment management-style specific and can be designed and managed for the specific needs (tax lot accounting) of specific individual investors, which is not possible in a mutual fund or for taking short positions, also not possible in mutual funds, etc.

For an indepth explanation of these investment products, see:

  Overlay Management: The Whole Product Solution? Senior Consultant, November/December 2002.
  Folios: The Next Generation Investment Vehicle, Senior Consultant, February 2001.
  Exchange Traded Funds: The Next Generation Investment Vehicle, Senior Consultant, March 2000.
  The Next Generation of Asset Management, Senior Consultant, August 1999.
  Hedge Funds Go Mainstream," Senior Consultant, June-July 2001.
  What Has Better Returns and and Lower Risk Than U.S. Equities? Managed Futures" Senior Consultant, September/October 2002.

[Return to the Top]