Investment Planning Process – Building a Portfolio

Building a portfolioHaving agreed a client’s attitude to risk, you need to construct a portfolio to help deliver the investment outcomes they expect.

Effective portfolio construction involves understanding clients’ investment goals along with their attitude to risk, and then choosing appropriate investments for them. One of the most important decisions when constructing a portfolio is asset allocation. This means making sure the portfolio has the right mix of assets to suit each customer and their investment goals and attitude to risk. You also need to regularly review the selection to ensure that the portfolio continues to reflect how these needs can be met in changing market conditions.

Building portfolios requires a lot of knowledge and experience. There are tools such as model portfolios that can be used to help determine the basic building blocks of the portfolios. The risk-return profile will determine this at a very high level, but you should not overlook the importance of diversification at asset allocation level.


Understanding investments

Improve your investment planning knowledge by watching the following three videos that introduce suitability, diversification and outsourcing investments.

Importance of diversification

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This video looks at how to measure investment risk, how to reduce risk through diversification and how to diversify a portfolio.

Importance of suitability

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This video looks at the fact finding process, how to determine your client’s risk score and how to read risk profile scores and assess suitability.

Outsourcing investment

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This video looks at which type of outsourcing is suitable for your client, what are Multi Asset Funds, why outsource investment management and what are the benefits of outsourcing.


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Support material

Business transition – investment planning options

Business transition

– investment planning options. By Mimi Pienaar

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Investment Planning

the seven key areas

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