Selection of Financial Products & Services for Implementation of Investment Strategy
The selection of financial product and services used by a financial advisor requires a methodical due diligence process that is applied consistently over time. The due diligence process used for the selection of financial products and services should address the following factors:
- Institutional standards;
- Investment strategy/philosophy;
- Risk adjusted performance;
- Return measurements;
- Analysis of fees and costs;
- Disclosure of conflicts of interest;
In some instances after careful consideration, the financial advisor relies on a selection process that can become subjective in nature when decisions are made to meet a specific client goal based on their unique needs and desires. In other instances, the complexity of the situation is so manifold that the financial advisor must make a recommendation that balances the competing concerns of a client including:
- Control of an asset;
- Liquidity of investment;
- Risk profile;
- Correlation of investment returns;
- Timing horizon;
- Tax efficiency; and
- Asset protection;
The decision-making process involved in the selection of financial products and services requires close collaboration with clients for the implementation of an investment management strategy that ensures the path is set towards your True North.
