Investment Design for Wealth Managers

By: Algorithmics  09-12-2011
Keywords: Regulatory Compliance

Algorithmics’ Investment Design for Wealth Managers solution provides a powerful portfolio and risk/return analytics platform for all wealth managers to properly construct, monitor and allocate investors’ portfolios. This enables wealth managers to grow their business, irrespective of their scale or the make-up of the client base. Investment Design for Wealth Managers is offered in three editions – Monitoring and Reporting, Standard, and Enterprise – that provide increasingly powerful risk/return analytics, ranging from the core capabilities required for monitoring and regulatory compliance through to multi-period optimization for advanced, customized financial planning.

Monitoring and Reporting Edition
The Monitoring and Reporting Edition of Algorithmics’ Investment Design for Wealth Managers solution not only provides wealth managers with the core capabilities required for advanced profiling of various products and client risk tolerance groups, but also enables the monitoring of the potential performance of the portfolio for compliance purposes.

Standard Edition
The Standard Edition of the Investment Design for Wealth Managers solution shares the same core capabilities as the Monitoring & Reporting Edition, while offering a richer set of simulations and other capabilities such as multi-period simulation.

Enterprise Edition
The Enterprise Edition of the Investment Design for Wealth Managers solution includes all the core capabilities of the previous two editions, but deployed in-house. This edition combines risk monitoring and reporting with a wide range of advanced portfolio and risk/return analytics, and provides a highly scalable and flexible platform for wealth managers who prefer to maintain full ownership of modeling and financial engineering for products and simulations. However, if a firm prefers not to manage data collection, structuring and validation, the Managed Data Service is still available as an option.

Asset Allocation Advisory Services
A major challenge for wealth managers, and a key point of differentiation in attracting investors to grow their business, is offering high net worth individuals customized portfolios that are optimized to meet each investor’s particular goals and risk appetite. Asset Allocation Services, underpinned by Algorithmics’ advanced risk/return consulting tools, can advise wealth managers how to construct optimal strategic portfolios and rebalance each investor’s portfolio to optimize the probabilities for achieving their personal financial goals.

Algorithmics’ Investment Design for Wealth Managers solution – in its Monitoring and Reporting, Standard and Enterprise Editions – is underpinned by Algorithmics’ industry-leading Mark-to-Future methodology. This provides wealth managers with the confidence that, irrespective of the edition selected, there is no compromise in the quality of the risk/return analytics.

Provides multi-period simulation for building long-term investment portfolios
Multi-period simulation, available in the Standard and Enterprise Editions, provides simulation of the risk/return profile through time to support the building of a consistent and optimal long-term investment portfolio. The built-in aggregation engine enables simulated data to be aggregated at a portfolio level; for example, to provide market views for an overall client portfolio.

Offers portfolio performance monitoring

Portfolio Performance Monitoring, available in the Standard and Enterprise Editions, offers wealth managers the capability to monitor the risk/return profile of every client portfolio, and enables “exception” reporting if it deviates from the targeted profile, to enable swift rebalancing. This monitoring includes “Value at Risk” (VaR), but also extends beyond such standard measures to include more advanced analytics such as Monte Carlo multi-step simulations.

Provides simulated data feeds to strengthen relationships with clients

Simulated data feeds into proprietary or third-party financial planning systems enable the delivery of the output for compliance and reporting purposes. This strengthens the wealth manager’s relationship with their clients as the whole financial planning infrastructure (data, risk analytics software and outputs from their own financial planning systems) is private-labeled, so that all is seen from a client’s perspective is the brand of their wealth manager.

Offers optional hosted validation service for enhanced transparency

An optional hosted validation service, available in the Monitoring and Reporting and Standard Editions, enables transparency, validation, and interaction with financial modeling and valuations.

Algorithmics’ Investment Design for Wealth Managers solution – in its Monitoring and Reporting, Standard and Enterprise Editions – supports the needs of all wealth managers, and in particular those servicing clients in retail and private banking.

Realize annual revenue objectives with product risk/return profiling
Product risk/return profiling provides wealth managers with the capability to map each product’s risk/return characteristics so that they can be categorized according to their risk profile. Mapping and matching products and clients’ risk/return profiles enables wealth managers to run marketing campaigns that are compliant with market regulations (such as MiFID) and help them realize annual revenue objectives.

Save costs and time of data processing with managed data service

The Managed Data Service – provided by CAPITECTS, a wholly-owned subsidiary of Algorithmics – collects, validates and enriches data for clients, providing the simulation of the underlying data sets, including a full valuation of securities, related scenarios and multi-period investment strategies. This innovative and turnkey approach helps save clients both time and data processing costs/power required to perform this computational task.

Create a differentiated proposition with asset allocation advisory services

Asset Allocation Advisory Services offers wealth managers a key point of differentiation in attracting investors and growing their business. These services can help wealth managers, who choose either the Standard or Enterprise Edition, enhance their relationships with clients while optimizing clients’ portfolios returns.

Enhance confidence with Algorithmics’ proven experience in solution implementation

Leveraging the experience of hundreds of successful implementations with financial services companies around the world, Algorithmics offers wealth managers a proven engagement methodology to help minimize the time and cost of implementation. With over 20 years of experience providing financial engineering, workflow management and decision support experience to clients, Algorithmics ensures the optimum match between wealth managers’ functional and strategic requirements and the deployment of the solution that will help wealth managers realize their clients’ financial objectives and, thus, grow their business.

Keywords: Regulatory Compliance

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