By: Paul Mendoza
This figure of speech can be traced back to the 1500’s with Don Quixote, and many applicable parallels have been drawn over time, from not keeping all of your goods on one ship to investment advice and promoting portfolio diversification. To be clear, the point of this article is not to debunk an old saying but rather to take an alternative look at this phrase and how it relates to wealth management.
How can a financial advisor act as a fiduciary and make trades in a client’s discretionary account if he or she doesn’t know what’s in their client’s other accounts? For example, an advisor that’s looking for income for their client buys a large block of AAPL corporate bonds. Unbeknownst to the advisor the client holds nothing but Berkshire Hathaway in their Roth IRA. At first glance, there doesn’t seem to be a problem until the advisor realizes that AAPL is Berkshire Hathaway’s number 1 holding… can you say exposure/issuer risk? It would have been much easier on the advisor if he was advising on the Roth IRA too, or at least knew about it. However, in today’s financial world of many eggs and many baskets, it’s hard for clients and wealth managers to keep track of it all.
Global Wealth Platform (GWP) is a solution that solves a lot of problems for today’s wealth manager. One of those problems is custodial data aggregation. Even if the assets are held-away and an advisor is not providing advice on a particular account, a full-service wealth operation should be able to at least report on all holdings. GWP helps advisors connect to their clients’ accounts regardless of the type of account and where it is custodied.
From a household perspective, the GWP solution can aggregate your client’s brokerage, SMA, UMA, IRA, 401k. We can also connect to your client’s spouses’ and children’s accounts to provide a holistic, aggregate-level view on the entire family’s investment positions. Where they were receiving 6 separate statements a month at 6 different times, your practice has the ability to provide a single client statement on all accounts at a single time.
Think of GWP as a virtual basket that looms its digital fibers around all of your investment baskets to track and report on all of those “eggs.” So while diversification remains an essential principle to modern investing, GWP helps you to efficiently and effectively track and maintain all the accounts your clients are trying to spread all over the place.
GWP provides a broad set of front – to – back office capabilities that allow wealth and institutional investment managers to automate the day-to-day activity in investment portfolios. Offered in a SaaS/Cloud deployment, the solution is a multi-currency, multi-asset class solution with a wide range of functions including portfolio management, order management, trading, compliance(pre and post), portfolio accounting, data management, performance measurement, client reporting, contact management, custodial data aggregation and more.
To learn how GWP can automate your investment operations, register for a special webinar for wealth management firms (broadcast date: November 16, 11:00 AM EDT), download our brochure, request a demonstration, or email us at email@example.com.