Overlay Management: The Whole Product Solution?

Overview: The question that persists during this particularly difficult period in the capital markets is whether the role and purpose of a brokerage firm is simply to execute securities trades or is there an associated responsibility to assist and/or empower the financial advisor to add tangible, quantifiable value through the exercise of their professional investment and administrative counsel. These two vastly different management philosophies in the financial services industry explain why top management at some firms seems to discount any need for change or innovation while other quarters of the industry deem it essential. Overlay management is a third level of asset management, complementing that of money managers and financial advisors, which addresses and manages portfolio detail at the client level. It greatly elevates the level of counsel and the investment considerations advanced with the client as the financial advisor manages the process in which value is added, defining the rules, parameters, constraints and metrics in which the overlay manager works within. Overlay management is a breakthrough that empowers all financial advisors to add value and will ultimately lead all financial advisors to use electronic versions of the six financial services investment process (asset study, investment policy, strategic asset allocation, manager search and selection, performance reporting, tactical asset allocation).

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Format: PDF | Size: 1,352KB | Date: Dec 2002 | Pages: 5