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Many people are wary of mixing business and social media. But in almost all the cases I’ve come across, it’s those who haven’t yet experimented with platforms such as Twitter, LinkedIn, Facebook and online blogs that are the sceptics.

The relationship between a financial adviser and their client is based on trust. Survey after survey has shown that, in spite of all the professional advice and analysis available to investors, it’s often word-of-mouth recommendations from family, friends and acquaintances that prompt individuals’ investment decisions. Social media is a sort of word-of-mouth form of marketing. The ability to read blog posts, follow Twitter comments, watch videos explaining investment products, count LinkedIn recommendations, track Facebook conversations (and numerous other ways of interacting via social media) can only assist the process of ensuring that clients’ needs and advisers’ services are suitably matched.

The ability to gain recommendations on LinkedIn is one clear metric that potential clients can use when researching advisers. Similarly, Twitter’s #FF (Follow Friday, whereby Tweeters recommend fellow Tweeters worth ‘following’) is another easy-to-digest indicator. But the key to social media is the ‘social’ part. It’s not a passive form of communication, it’s active and interactive, whereby advisers can display their expertise and reach out to potential clients in an ever-increasing number of ways.

Being a relatively new phenomenon, there are few statistics on how social media usage has impacted the adviser-client relationship but I would wager that those advisers who are writing blogs, creating videos, hosting webinars and engaging in online conversations to inform and update on industry developments are those most likely to grab the attention of potential clients. And in doing so, those advisers can better ensure that they secure clients whose goals are aligned with their areas of expertise. Social media provides the opportunity to share knowledge and broaden reach in a live, concise and personal manner. After all, behind every investment portfolio there’s a human being—interaction is what we’re all about.

Posted in: IFA News and Commentary,

Morningstar held a well-received webinar yesterday on Investment Trusts. Titled “Investment Trusts: Back in Vogue”, the session was hosted by Jackie Beard, Morningstar’s Director of Investment Trust Research, and myself, Tom Treanor, Investment Trust Specialist . Investment Trusts have been largely passed over by non-institutional investors in favour of open-ended funds, but they have a number of advantages that we believe make them an attractive addition to any investor’s portfolio.

With the first Investment Trust, Foreign & Colonial, launching way back in 1868 and still going strong today, they’ve certainly proved they have staying power.

We believe a few key trends are set to prompt a renaissance in retail ownership of these vehicles: the advent of the Retail Distribution Review will require advisers to take a “whole-of-market” approach, while the search for sustainable and diversified sources of yield in the face of historic low interest rates and well-publicised suspensions of dividends should also see a resurgence in interest in the closed-end structure. This not only offers unique benefits for those seeking yield but is also ideal for those who wish to diversify their portfolio through access to alternative asset classes such as private equity, property, hedge funds, or even forestry.

In the webinar, we took a closer look at these issues and discussed why we think these vehicles deserve a place in portfolios. We also covered a case study example of how to assess closed-ended funds and looked at some of the similarities and differences with their open-ended counterparts. The feedback from the audience was very positive, with several interesting questions posed: do we think the trend in new fund issuance is likely to continue?; how do we see investment trusts fitting into existing client portfolios? To hear the answers and view the webinar, please click here. If you’re not already registered with BrightTalk, you’ll need to do so but this is free and only needs to be completed once.

Posted in: Research,

How rigorous is your client reporting? Do clients value the work you and your staff put into reports? Do they help justify your fees?

One ironic thing I have learned is there is no standard for client reporting amongst IFAs. Some firms produce beautiful output for clients. Some firms simply do not. Why the disparity?

Based on the conversations I’ve had, it depends on the resources available to the adviser, the process that’s in place and the clients who will end up reading (hopefully) the reports. A good combination of the first two may allow a business to service clients that otherwise would not be profitable.

I’ve heard a lot of talk of RDR pushing people towards the banks because normal folks won’t be able to afford an independent adviser. But if an adviser has an efficient process in place that provides automatic report generation and cheaper operating costs, suddenly a lot more people become potential clients.

So is the level of reporting you provide a chore, or an opportunity to demonstrate value to clients?

Client segmentation has been another popular issue. For some clients a simple, compliant report does the job. But for more discerning clients, the value is in the attention to detail. If clients are to pay fees, the quality of information their adviser provides surely plays into the value of those fees.

If your current reporting process is setting you apart from the competition, you are ahead of the curve. If you, or your back office staff, are toiling over spreadsheets and collating documents from 8 different places, it doesn’t have to be that difficult. Consider a process that anyone can follow and make it consistent so clients become familiar with your review process. Consider each client and provide an appropriate level of detail – which will lead to easier segmentation of your client base. And consider the educational value of the reports for your clients because an educated client (usually) makes better decisions.

Producing high quality reports and analysis for clients can be a huge opportunity to add value and distinguish your service. If you’re in need of improving this aspect of your business Morningstar can help. If you’re proud of your client service please feel free to share in the comments below.

Posted in: IFA News and Commentary, Morningstar,

In addition to security data and quantitative analysis, Adviser Workstation provides access to Morningstar and OBSR Qualitative fund ratings and reports. To access qualitative fund ratings and analystreports, follow the steps in this short video.

Posted in: Morningstar, Training Videos,

Looking to improve your investment research capability or streamline your research process? You can use Adviser Workstation to do both.

Have a look at this

short video which shows how to build detailed, repeatable searches in Adviser Workstation. Easily create searches that show only rated funds, funds of a particular sector or category, funds that can be used in an ISA or funds available on a particular platform. And you only need to create the search once, then save it. Each time you use the search the results will be updated.

Posted in: Training Videos,

We are very pleased to announce that Jackie Beard, former director of UK fund research, will now head-up Morningstar’s investment trust research in the UK.

If you have attended an Adviser User Forum in the past you’ll remember Jackie and her razor sharp wit when discussing fund ratings and analysis.

Leaning on her 12 years of experience in the UK fund management industry, Jackie’s goal is to increase advisers’ awareness and understanding of investment trusts through a research-focused effort. We see a huge need for more independent investment trust research, especially considering many advisers will need knowledge of the “whole-of-market” come 2013.

Jackie and her team will be joining us at future Adviser User Forums to discuss their research initiatives and how investment trusts might fit into client portfolios. I would highly recommend attending if you are able to make one of these events. For further information, please find a copy of the press release in entirety here.

Posted in: Morningstar, Press Releases,

Morningstar collects full holdings data from asset managers in order to provide a complete analysis of a fund’s holdings and asset allocation. Unfortunately there are still a small percentage of funds in the database that do not have full holdings data. If you are producing portfolio reports that show a portion of the holdings as “Unclassified” you can manually reclassify a fund’s asset allocation. Click here to view a short video of this process.

Posted in: Training Videos,

Adviser Workstation provides a full suite of portfolio management and reporting tools that provide up-to-date portfolio analysis at your fingertips. The quickest and easiest way to analyse your clients’ portfolios is to import them from the platform or wrap where they reside. Click here to view a short video of this process.

The example is with the Transact platform, however the process in Adviser Workstation is very similar across other platforms.

If you do not see your preferred wrap or platform in the list of Custodian and Accounting Templates, please let us know. We can build a custom template just for you.

Posted in: Training Videos,

Across different geographies and asset classes, more and more fund managers seem concerned about the consequences of the perceived Chinese housing bubble.  They worry that recent, rapid house price rises in the country are unsustainable and could lead to a catastrophic collapse that would be especially painful because of the crucial importance of Chinese growth to the fragile global economic recovery.

Indeed, the fearful response from global stock markets to Chinese authorities’ policy tightening in January was emblematic of the importance with which investors attach to the country.

There is now increasing concern that further action by the Chinese authorities to prevent property speculation – already under way through crackdowns on third home borrowing in some areas – could lead to a dramatic fall in fixed asset investment, which last year accounted for close to two-thirds of Chinese domestic demand.

Any significant slowdown in this part of the economy would have a direct impact on sectors such as commodities as well as risking a further downturn in investor risk appetite.

This risk is clearly weighing on the minds of many fund managers and contributing to an element of caution from investors.

However, there is another side to the argument and it may well be that they are overestimating the risks in the Chinese housing market.

Whilst it is clear that the four cities of Beijing, Shanghai, Guangzhou and Shenzhen have witnessed large price surges, this is far from a nationwide picture and these cities only represent a very small fraction of China’s homebuilding by volume, while public housing projects in other areas are unlikely to be threatened.

As a result, it would seem there is no reason for the necessary tightening to trigger a serious Chinese downturn if the authorities are able to target the pockets of speculation precisely.

It should also be remembered that, unlike the pre-2007 US housing boom, there has not been a culture of creating leveraged portfolios of mortgage-backed securities, reducing the systemic risks from a fall in Chinese house prices.

By Anthony McDonald
OBSR, a Morningstar Company

Posted in: Morningstar OBSR Commentary,

With summer in full swing I’m wondering if advisers are taking this time to get out and see more clients and prospects or are you re-evaluating any processes to see if you can improve the way you do things or add value to your service?

It would seem to me that this isn’t the busiest time of year, at least not for our clients, so how do you approach a slower period? If you’re in the office reading this it means you’re not in Spain, Italy or the South of France. Are you catching up or re-tooling?

I have had some clients in for training recently who are keen to start automating more processes in their offices and they’re looking to Adviser Workstation to help them. Importing client portfolios from wraps has been a very hot topic.

I have helped our clients import portfolios from Transact, Nucleus and Advent and we will be adding additional platform templates in September to make it easier for more advisers to import portfolios into Adviser Workstation. If you’re not using the import facility yet, why not? What can we do to help?

Evaluating a current investment process also seems to be something many of our clients are doing this summer. Is the current process compliant? Is it consistent? Does it produce results?

I know we have had these discussions this summer so we’re hoping there are some good ideas being considered and some self assessment taking place.

It is pretty easy to get caught up in the hum of business as usual during the year so a little reflexion and re-assessment can go a long way.

If you have time this summer to re-evaluate some aspects of your business, give us a call or send us an email – we would be happy to help. I guarantee there are things the system can do to help you add value, save time and mitigate risk.

Posted in: IFA News and Commentary, Morningstar,