Challenges of a Growing Practice: Managing Portfolios

One of the greatest challenges advisors face is efficiently managing their clients’ portfolios. Moreover, as the number of clients grow, unless we have a good system in place, the challenge may only get worse. Here’s what I’m doing to stay on top of this all-important task. 

Delegate or Do-It-Yourself?

As advisors, we are obligated to manage our clients’ assets to the best of our abilities; some under a fiduciary capacity, some under a suitability requirement. We can do it ourselves or delegate this task to an outside firm. Giving this task to an outside firm would require that we have a great deal of trust in them, much as our clients had to have when they selected us as their advisor. At this point, I choose to manage client assets myself. However, I can imagine a day when I outsource this to a money management firm. If you are doing it yourself, a necessary prerequisite will be to divide your book into segments. Let’s take a brief look at this. 

Inch by Inch, It’s a Cinch

One of the most important issues we can tackle is client segmentation. In other words, we need to divide our clients into groups, based on certain criteria, and determine the services we will provide to each group. Many of us, myself included, would like to provide the same services to all clients, but in reality, this is not feasible. Therefore, I have grouped my clients into A, B and C. Nothing startling there, I admit. What’s important is that you create the groups and that the segmentation works for you.