OASIS
OASIS is North America’s first EIM (Electronic Investment Management) Process. The EIM Process reduces the amount of unfulfilling, mind-numbing work advisors routinely complain about by automating routine administrative tasks.
Advisors implementing OASIS fill out all company specific or mutual fund company forms and applications electronically, reduce trade follow-up by 80% or more, electronically monitor all on book client accounts for portfolio drift, and eliminate labour intensive calculations required to move an old mutual fund portfolio into a new one without triggering DSC charges.
Since OASIS in Internet based, advisors can access and work on their client base from anywhere, world-wide without having to lug around their laptop!
Comments from advisors using OASIS
Unlocking Your Client’s Investment Potential
There are only three keys to attain investment management success with your client base:
1. Understanding the client’s tolerance for risk
2. Optimizing the holdings of your client
3. Implementing a dynamic rebalancing policy
By successfully implementing a complete investment management process, advisors can greatly enhance returns for clients, while at the same time reducing their own internal work load.
Key 1: Understanding Your Client’s Tolerance For Risk
Step one of an investment management relationship is determining a client’s personal tolerance for risk. This is accomplished either through the process of completing a financial plan, or a risk-tolerance questionnaire.
Understanding your client’s personal tolerance for risk is critical for long-term success. The most successful investors are successful because they are able to stick to their investment strategies. The better the client and investment portfolio are matched, the more likely your client will be able to stick to your investment recommendations.
OASIS contains an artificially intelligent questionnaire presented in an Adobe format. It is fully interactive, will help you select an appropriate level of risk for your clients, and best of all will cross reference the time horizon and the return expectations of your clients automatically.
Key 2: Optimization of Holdings
Everyone knows diversification is a cornerstone of investment management, but not every advisor realizes investment portfolios can be pushed a little further by optimizing the weight of the individual holdings.
By comparing the individual risk, return and expected future return of each security, OASIS can search a multi-dimensional math terrain for that perfect mix of risk and return.
Diversification offsets some individual security risk…
...but what if the volatility of the offsetting securities are different?
OASIS can optimize the holdings of your portfolios to take advantage of those differences. With the ability to review portfolios in only seconds, an efficient frontier of optimized portfolios can be generated. By changing the weighting of individual holdings rather than asset classes, OASIS can dramatically increase portfolio returns, or decrease overall portfolio risk.
Review a risk return analysis report summarizing the effect of optimization on diversification.
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Review of David Swensen’s book by the New York Times nytimes.com edition outlining problems with the mutual fund industry as well as the advantages of regular portfolio rebalancing.
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Key 3: Dynamic Asset Allocation
Once a long-term policy mix is established, a dynamic re-balancing policy is implemented.
Why Should You Rebalance Client Accounts?
· Rebalancing is passive timing—the process naturally buys low and sells high.
· A clear policy avoids the risk of ad-hoc portfolio revisions.
· Rebalancing is necessary to achieve the value-added benefits of an optimized portfolio.
· A Plan may incur unintended risk if no re-balancing policy exists.
By selling securities that are trading unusually high, and buying securities trading unusually low, we are able to reduce risk and increase returns even further than portfolio optimization alone.
In a study published March 6, 2000 by Michael D. Smith, CFA, Research Director of Hewitt Investment Group to determine what style of rebalancing an optimized portfolio added the most value, the following conclusions were reached.
· A buy-and hold strategy clearly results in a higher risk portfolio with an average equity exposure well above target.
· By targeting an allocation, and maintaining the target resulted in higher returns than a buy-and-hold strategy
· Annual rebalancing has proven to be a poor strategy historically.
When Should You Rebalance Client Accounts?
After running through historical data from 1973 through 2Q of 1999, Mr. Smith determined the best way to rebalance an optimized portfolio is to rebalance by deviation from weights, rather than quarterly or yearly.
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The Canadian Securities Institute came to the conclusion that re-balancing enhances returns in a weak market period through the purchase of the weak asset class at reduced price levels. The Canadian Securities Institute also concluded that the ideal approach to re-balancing is to re-balance based on deviation from weights rather than re-balancing temporally.
How Can OASIS Unlock The Investment Potential Of Your Clients?
1. OASIS helps ensure every client has a risk tolerance questionnaire and Investment Policy Statement completed and on file for future reference.
2. Securities can be mixed and matched up to 15 at a time to create an optimized portfolio specifically matching your client’s personal risk profile.
3. Electronic portfolio rebalancing in OASIS can be set up to monitor every client in your book of business. Now every client can be dynamically rebalanced to avoid portfolio drift and at the same time maximize portfolio returns.
Automate your office by implementing OASIS today!
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OASIS Summary
