Portfolio Management Top of Mind for Advisors in 2015

Portfolio Management Top of Mind for Advisors in 2015

Portfolio management was advisors’ top concern in the first quarter of this year, according to a recent Fidelity survey, an indication that advisors are getting more discretionary with their client accounts. Nearly a third of advisors cited portfolio management as an area of focus during the quarter, up from 18 percent in the fourth quarter 2014, according to Fidelity’s Advisor Investment Pulse. Market volatility was the second biggest concern, at 22 percent, up from 19 percent in the prior quarter.

Industry resources for advisors around portfolio management have been unevenly distributed, so an increasing number of advisors are moving toward rep as portfolio manager models, said Scott Couto, president of Fidelity Financial Advisor Solutions. Over half (54 percent) of advisors say they’ve used rep as portfolio manager platforms for the past five years, managing investment portfolios across client accounts, according to a recent WealthManagement.com survey of 750 advisors.

“You get this situation where more and more advisors are taking discretion over their client portfolios,” Couto said.

In addition, a lot of clients are asking advisors why their portfolio didn’t perform in line with the S&P 500 at the start of the year, Couto said, so advisors are having to defend their portfolio allocation.

Market volatility is, perhaps, top-of-mind because of the headlines on Europe, Russia, China, Southeast Asia and Korea, Couto said.

In fact, international investing was more of a focus for advisors during the quarter, with 11 percent citing it as a concern, up from 5 percent in the fourth quarter.

“Change creates opportunity,” Couto said. “Astute advisors understand that, so they’ve been looking for ways that they can take advantage of situations that are improving overseas.

“Within the last eight to 10 weeks, as the dollar has strengthened, people want to understand what opportunities this may create for non-U.S. companies.”

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