How to Streamline Client Portfolios

Managing client portfolios can take up a significant part of your day when you’re spending time researching investments, running model scenarios and scheduling trades. That may leave you fewer hours each week to spend with clients or dedicate to prospecting and marketing. Streamlining client portfolios and the portfolio management process can help you get some of that time back. Not to mention, you can deliver a better client experience and increase engagement while scaling your business.

Are you looking to expand the marketing of your financial advisor practice? Try SmartAsset AMP, a holistic client prospecting and marketing automation platform.

5 Ways to Streamline Client Portfolio Management

Improving efficiency in your business begins with being organized, though you should keep in mind that what works for one advisor may not work for everyone. These strategies can help you chart a smoother course toward a more streamlined client portfolio management process.

1. Consolidate Accounts

It’s not unusual for clients to have multiple investment accounts, including accounts managed by you and those held elsewhere. Consolidating can reduce the number of accounts you need to monitor, and potentially increase your firm’s AUM if you’re able to bring assets held away under your management.

Talk to your clients about the benefits of consolidating their portfolio. Better yet, show them a sample financial plan that’s based on a consolidated strategy. Portfolio visualizer tools can help you model potential outcomes from consolidation. You can also offer a visual breakdown showing fee comparisons for a consolidated vs. unconsolidated portfolio.

If your clients are reluctant to consolidate, consider what else you might do to simplify your role in managing their portfolios. For instance, you might offer a secure portal or dashboard that allows clients to see all of their accounts in one place. If clients have questions, they can message you through the portal to get a response, versus scheduling a meeting.

2. Prune Investments

Consolidating can leave you with fewer accounts to manage, but you can go a step further in your efforts to streamline by reducing the number of investments in those accounts. Here are some of the ways you might do that.

Look for overlap. Review client accounts to check for duplicate holdings or multiple variations of similar assets. For example, if your client holds a bond index fund in their IRA and an ETF version of the same fund in their taxable account, ask yourself whether they’re best served by keeping both. You can also check for overweighting, which could be exposing your client to unnecessary risk.
Factor in client goals. If you’ve been working with a client for some time, their goals may have shifted. They may own investments that no longer fit into their broader financial plan. In that case, it could make sense to sell some or all of those investments and redirect the funds into another area of their portfolio to maximize growth.
Diversify with purpose. Clients need diversified portfolios, but they don’t need the kitchen sink. If you’ve constructed a client portfolio spanning multiple asset classes, consider what purpose each investment serves. You may recommend that clients remove investments that deliver minimal upside.

Paring and pruning investments should be a collaborative effort. The goal is to build a portfolio with intention, and engaging the client in this process ensures that you’re both satisfied with the end result.

3. Benchmark

An advisor creates a plan for streamlining client portfolios.

Benchmarking a client portfolio means applying a benchmark or standard to evaluate its overall performance. From a portfolio management perspective, benchmarking makes it easier to:

Determine whether a portfolio is underperforming, overperforming or meeting expectations
Evaluate the health and stability of specific assets within the portfolio, against the backdrop of broader market trends
Measure risk exposure and identify opportunities to bring portfolios back into alignment if they’ve deviated from a client’s preferred risk level

Effective benchmarking begins with selecting the appropriate standards for comparison. For instance, you may use a specific market index, rely on one or more model portfolios, or develop a custom benchmark.

You’ll also need to develop a schedule for tracking your chosen key performance indicators (KPIs) and conducting performance reviews. Once reviews are complete, you can communicate the results to your clients with recommendations for any portfolio adjustments that should be made.

4. Prioritize and Delegate

You only have so many hours in the day, so it makes sense to prioritize and delegate client portfolio management tasks whenever possible.

The following are some ways to do both:

Segment your client list according to urgency, with portfolios that require immediate or urgent attention at the top.
Identify portfolio management tasks that can be delegated to other members of your team and assign those tasks accordingly.
Consider outsourcing tasks that require more heavy lifting on your part, such as compliance.

Developing standardized workflows can ensure that everyone on your team understands their role in managing client portfolios. That’s something you may be able to do inside your customer relationship management (CRM) platform.

5. Automate Portfolio Management

Automation can free up valuable time that you can dedicate to serving clients or marketing your business. Some of the processes you may consider automating include:

Analytics and modeling. Data collection and analysis can be exceptionally time-consuming. Artificial intelligence (AI) tools can track data in real time and generate model portfolios that reflect clients’ risk tolerance and goals at a much faster speed.
Rebalancing. Rebalancing ensures that client portfolios don’t stray too far from their desired asset allocation. Automated rebalancing is built into many of the top portfolio management software platforms.
Reporting. Automating client reporting allows you to pull data from multiple sources and organize it into a single, unified format. You can generate comprehensive reports for clients in less time, without sacrificing accuracy or value.

Look at your tech stack to see which tools you currently have that offer automation features. Then, consider which steps of the portfolio management process you feel most comfortable automating.

Bottom Line

Every client portfolio is different, and some may require more of your attention than others. While you may want to be everywhere all at once, that’s not realistic. Streamlining client portfolios and portfolio management can ensure that you have enough time to handle all of the most important tasks for your business, without sacrificing client satisfaction.

Tips for Growing Your Advisory Business

As more investors turn to online searches to connect with financial advice, advisors are increasingly relying on digital marketing to raise brand awareness. Developing email marketing campaigns, building a search engine optimized website and getting active on social media can help you attract your ideal clients, but it can take time to gain traction. If you’re looking for a simpler way to get your message in front of the right prospects, you may consider partnering with an advisor marketing platform like SmartAsset AMP. SmartAsset AMP (Advisor Marketing Platform) is a holistic marketing service that financial advisors can use for client lead generation and automated marketing. Sign up for a free demo to explore how SmartAsset AMP can help you expand your practice’s marketing operation. Get started today.
Streamlining client portfolios can take some of the stress off your shoulders as you manage your firm’s day-to-day operations. If you feel overwhelmed or stretched thin, you may consider culling your client list to focus on a specific segment or niche. While it may seem counterintuitive to work with fewer clients, it could lead to growth if you’re working with the right clients. That means clients who are your ideal fit, whether that’s ultra-high-net-worth individuals, the mass affluent or somewhere in between. Developing buyer personas or profiles can help you identify exactly who it is you want to work with and what problems you’re equipped to help them solve. You can use those personas as a guide to reframe your marketing so that you’re consistently attracting your target clients.