In Auren Chile we provide oversight and support for clients that have large financial portfolios.
Many clients have financial portfolios. The client interacts with their financial advisor, and investment decisions are made taking into account what the advisor interprets as the clients’ needs.
However, the portfolio will only perform as required if the clients’ needs can be expressed through some form of metric, against which the portfolio´s performance can be compared, and which should always be measured net of all fees. The metrics do not always coincide with accounting results.
Large portfolios are often divided between several advisors, searching to diversify counterparty risk. But this also adds complexity and the clients are focused on running their businesses, not their portfolios. In addition, portfolios are composed of many and varied instruments, many of which are issued by the same companies that employ the financial advisors.
The portfolios should be run with a fiduciary view, not a product sales view.
All of the above point to the need for an assessment that should be carried out by someone not involved in the financial decisions but with the necessary tools to be an effective counterpart for the financial advisors.
Andrés Goijberg, Corporate Finance Director from Auren Chile