A better way for you and your clients
DFSPS has no institutional links and does not suffer any material conflicts of interest. This means that DFSPS is enabled to make clear decisions with no bias or concern for outside influence. Most importantly, it lays down a solid foundation for DFSPS to act entirely in the best interests of its clients.
DFSPS Model Portfolios
As highlighted in the adjacent diagram, DFSPS offers a suite of Asset Class or Sector based Models, which advisors use to customise their clients’ asset allocation. Alternatively, fully implemented portfolios are available through Risk Profile Models for Advisors who prefer to outsource all asset allocation and investment selection decisions. Your firm has the option of maintaining its own branding through a white-label structure and tailor investment solutions by blending your internal capabilities with the DFSPS Models. In this regard, your Advisors can use the Asset Class and/or Risk Profile Models to manage a portion of their client portfolios, whilst continue to customise the rest.
DFSPS constructs Asset Class Models for each major asset class (13 in total), the objective of which is to generate returns (net of fees) above each stated benchmark through active management.
The Risk Profile Models (RPMs) provide clients with timely and efficient portfolio outcomes which are achieved by automated re-balancing in line with the dynamic risk based asset allocation process employed. All portfolios incorporate investment risk. They do so to generate returns above those of risk-free investments, which are generally not expected to provide sufficient returns above inflation over the long term. As investors have a need to increase real wealth, returns in excess of inflation are required. As such, taking on investment risk becomes inevitable.
Given that dynamic market forces can cause portfolio values to vary and fluctuate significantly, the question ultimately turns to…”what is the appropriate level of risk?” The question is confronted by two competing factors, namely: (1) the desire to maximise real wealth (which generally encourages higher risk taking); and (2) the anxiety experienced by investors during periods of market disruption (which encourages less risk taking).
Investors have experienced two periods of significant market disruption in recent times, namely the bursting of the IT bubble (2000-2002) and the GFC (2007-2009). These periods highlighted the risk management deficiency of conventional asset allocation approaches, which saw many portfolios breach their risk tolerance levels. Since 2012, DFSPS has been employing a risk-based approach to asset allocation. We believe it produces better portfolio outcomes compared to conventional portfolio management. We comprehensively measure and monitor portfolio risk with the objective of managing the risk levels to specified targets. When material changes in market risks are observed, we stabilise the portfolio risk by changing the asset allocation. Additional risk management is incorporated to better manage equity risk, which is the most dominant portfolio risk factor. This additional downside risk management strategy is generally employed during periods where the support for equity markets has broken down and valuations are stretched.
The Dynamic Risk Managed Portfolios can be accessed at a low cost through the Indexed Models series or alternatively through the Alpha-series which combines both active and passive investments to increase the level of portfolio diversification.
Timely and effective client communication and the ability to swiftly implement portfolio changes across your entire client base provide a strong foundation to transform your Practice to a highly efficient and transparent business. Integrated reporting and support unclogs operational congestion, allowing Advisors to focus on client service and relationship management.