The recent volatility in markets and the relatively short tenure of fund managers means that advisers and clients can have to act quickly. However, there are inevitable delays where the adviser needs to confirm to the client their recommendations and then await a response.
We and our clients use the services of various discretionary fund managers. By comparison, a discretionary fund manager can move swiftly to react to situations as they arise, by maybe moving client money into an equivalent fund, or maybe take advantage of market opportunities as they arise.
Traditionally, discretionary fund management has been seen as too expensive for many clients. Utilising model portfolios can be an effective way to use discretionary services. Model portfolios can take various forms based on investment aims and defined risk, from cash-orientated through the spectrum to highly adventurous. Clients can then invest depending on their attitude to risk and reward.
Portfolio re-balancing is undertaken to ensure each portfolio stays within its remit and investment risk profile and is one of the major attractions of using discretionary model portfolios. A fund manager should also have the flexibility to create tactical rebalancing. This can be done to protect a portfolio from short-term excessive market, while long-term strategic rebalancing can take account of shifts in valuations between equities and fixed interest through asset allocation in the model portfolio.
As a company, we are increasingly using discretionary fund managers with our clients, providing a portfolio that is suited and continues to suit their risk attitude, whilst offering the managers the flexibility to make tactical decisions as required. Should you require further information, then please do not hesitate to contact us.