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Karen Fitz Ritson: Pamper your clients because regardless of the size of their portfolio, they keep you in a job.
Dennise Williams, Staff Reporter
THE PORTFOLIO management trend is taking off in the Jamaica financial sector.
Well established in North America, the financial sector presents it as a win-win situation for all involved.
It is either a new revenue stream - if the company charges the fee - or a way to attract new business - if a fee is not charged.
Clients are promised a personalised financial plan that takes into account where they are now and where they want to be.
However, concept is usually something different from execution. Director of Fitz Ritson & Associates, Karen Fitz Ritson, sat down with Sunday Business to explain the concept.
Sunday Business: What is portfolio management?
Karen Fitz Ritson (KFR): Portfolio Management is simply the ability to structure an investor's wealth through various investment instruments. The ultimate goal is to meet satisfactory returns on the investment.
SB: For some entities, portfolio management is a young discipline for their employees. What areas of improvement, in your opinion, are needed?
KFR: Portfolio management is a science that involves not only the fundamental and technological applications to choose the appropriate instruments, that is, the risk analysis and the analysis of instruments - whether stocks or bonds - but also, there is the subjective yet growing aspect of analysis of investor psychology. Practitioners should view this process and relationship with their client as being a partnership and not simply telling the client what to invest in.
Many practitioners are often guilty of not doing sufficient due diligence and research to gain the desired return to meet the client's objective. Therefore, your success or failure as a financial adviser is how you manage your client's needs.
SB: We have looked at the financial institution's side, what role do investors play in the portfolio management process?
KFR: As an investor, I would test the waters by assessing their technical competencies through certification or their track record as financial advisers in the industry. To further pursue my assessment of the technical competencies, I would engage them in their knowledge base of the macro and microeconomic environment, the players and their instruments.
SB: What about the financial institutions themselves? How can they set up an environment where clients can get adequate return on investment?
KFR: My advice to employers who seek differentiation, is firstly to employ people who like people and are confident to interact and communicate effectively with the clients.
Do you know what it means to a client when you walk into the organisation and you remember their name when you greet them warmly? Over the years, I have heard many colleagues state that, that is primarily the reason why they remain with their existing provider because they make them feel special.
Pamper your clients because regardless of the size of their portfolio, they keep you in a job, you do not know what their net worth will be tomorrow. If you open your doors to serve all, treat them all with the same respect.
Secondly, employ people who demonstrate the right attitude and are not afraid to stretch themselves. Diversity of thoughts and applications is key and this enables the organisation to grow and avoid 'group think'.
SB: Any final thoughts?
KFR: Portfolio management is a very complex yet dynamic and evolving science.
Firstly, you need to understand the market you are operating in, therefore conduct an acid test of the economy and formulate your own conclusions.
Listen to your clients carefully, this is the only way you can guide them. Engage them in the process and do not be afraid to disagree with them when you do not agree with their strategy, your reputation is on the line; remember they came to you for your advice.
Transparency is the key! When organisations develop this cadre of skills, regardless of the investment climate, your organisations and clients will weather the storm! Be the marathon runner and not the sprinter!
