Philip Petursson:  New Strategies in Managing Portfolios

Philip Petursson, Managing Director of Manulife Asset Management’s Portfolio Advisory Group, encouraged attendees at the 2015 Distinguished Advisor Conference (DAC) to think differently about portfolio management. He asserted that, in an attempt to serve clients and build value by customizing portfolios, advisors are following an approach that is actually inefficient and unproductive.

Instead, Petursson proposes that just three model portfolios, which can be tweaked to suit individual situations, will cover 90% of client needs. So what does the ideal portfolio look like?

• Build it by starting with the right question: What are your financial goals and objectives?
• Don’t focus on the risk to your client’s psyche, but rather the risk to their objectives.
• Trying to diversify a portfolio is right, but we mustn’t do it for the wrong reasons.
• While client’s objectives may be for the long-term, the asset allocation should be reviewed on a short-term basis (no longer than every twelve months, because we cannot reasonably predict beyond that timeframe).
• Take how the client invests (that is, usually on a regular basis rather than a lump sum) into account when considering how to allocate the assets.

Your clients’ objectives will fall into three major phases: accumulation (when they can take more risk), transition (when they are closer to retirement and need to manage risk), and distribution (the income generation phase when principal protection is paramount).

Petursson recommends building just one portfolio for each of these phases and making minor adjustments depending on your individual client’s specific goals and objectives. He also gave the DAC audience many insights into investment projections and trends in global markets.

The Distinguished Advisor Conference 2016 will be held November 6-9 in beautiful San Diego, CA.  The theme is SOAR HIGHER: Plan for Your Greater Potential and registrations and sponsorships for this extraordinary think tank and professional development opportunity are now being accepted at Knowledge Bureau.