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The proper purpose of investment advice is to improve a client’s portfolio in terms of maximizing return for an appropriate level of risk. Asset management techniques for optimizing the investment value of forecasts of return and risk have been available for fifty years. Markowitz provides the classic definition of optimality: a portfolio is risk return efficient if no other portfolio has higher expected return for a given level of risk or less risk for a given level of expected return. The set of all portfolios that are risk-return efficient are said to form the Markowitz efficient frontier. Markowitz also developed mathematical methods for solving the risk-return optimization problem.

 

From the perspective of fifty years, it is paradoxical that many managers and advisors don’t use portfolio optimization investment technology in their work. While until relatively recently optimization computer programs were difficult to use and often required special analytical ability, it is not true today. Protégé’s Portfolio Management System for computing Markowitz efficient portfolios require virtually no computer or analytical expertise. Yet the paradox of managers and advisors ignoring investment technology that, conceptually, uses their information optimally, remains. Are advisors not acting in their own or their client’s best interests?


Features Vs Benefits

Portfolio Manager Relationship Manager Client
Model Portfolios The PM can create model portfolios for individual and for collective investment schemes. The model portfolio can comprise of any number of asset classes. Each model portfolio contains additional information about the composition, risk classification, Net Asset Value and Inception Date. The system lets the FA select the most efficient model portfolio given the risk tolerance level of his client. The FA can monitor the performance of his clients' portfolios and can take corrective action, if required. The discerning client can monitor his investment portfolio from the web and get up to the minute information about what’s being done with his portfolio. He can then seek the advise from his FA for recommendations or can give instructions directly to the PM.
Rebalancing Asset rebalancing is a natural way to sell high and buy low. Using this technique, PMs can definitely attain better returns on their investments. The FA sets the investment policy after consulting with the PM and his client. Client is fully aware of the investment policy for his risk profile. He will be able to monitor activities at every stage of asset rebalancing.
Rebalancing in the presence of transactional costs The PM can set the value of transactional costs, so that portfolios can be optimized efficiently. This feature ensures that the client does not lose money as a result of rebalancing. Ensures that the FA doesn’t inadvertently rebalance his clients’ portfolios in the presence of transactional costs. Return on the client's investment portfolio is maximized.
Rebalancing Multiple Accounts The PM can rebalance multiple accounts with just a click of the button. The system validates against the investment policy, cash position, and transaction costs. The portfolio management system rebalances thousands of accounts, and therefore concurrently generating dealing tickets that need to be processed by the fund houses. Able to monitor multiple accounts concurrently with ease. More timely execution of investment policies.
Compliance All switching are based on a sound investment policy. All entries are recorded for the purposes of audit trail. The PM can be rest assured that the system is complaint to all regulatory requirements.


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