disciplinedIQ Investment Advisory Process


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Investors and Advisors

Investors have basic expectations of their investment advisors. It has been our experience that while some advisors may strive in earnest to meet these expectations, they are commonly not fulfilled due to being entrenched in traditional industry practices, investment firm constraints, and lack of motivation or knowledge on how to meet these expectations. For example, consider the following statements derived from our personal conversations with investors as to their expectations of advisors and what have been many of their actual experiences:

Fiduciary Standards of Care
Common Expectation: Investors expect advisors to consistently utilize appropriate standards of care (The Fiduciary Standard) in managing their investment portfolios. This includes the establishment of specific management principles and practices. Common Experience: Many investors feel skeptical that their advisors are positioned to act in their best interest citing the use of restrictive brokerage arrangements or the deferral of portfolio management to a third-party or back-office department.
Disciplined Investment Monitoring and Management
Common Expectation: Investors expect advisors to use a timely, consistent, and transparent reporting process for the review of portfolio holdings against appropriate investment selection criteria. This expectation includes consideration for both purchase and continued ownership. Common Experience: Many investors feel that they can only hope their advisors are forthright in portfolio reporting as this information is difficult for investors to verify. Some investors feel that firms' "preferred" or proprietary investment practices results in biased review and reporting.
Risk Management
Common Expectation: Investors expect advisors to maintain consistent balance between the risk they are willing to bear and the risk in their investment portfolios, making adjustments to portfolio risk as needed. Investors often ask, "So you will be watching the markets and tell us if we should make a change?" Common Experience: Many investors are not comforted by the common statement, "eventually your portfolio will recover". They feel their advisors should provide more proactive risk management rather than rely on inflexible strategies which force them to occasionally endure market risk beyond their risk tolerance.

The disciplinedIQ Investment Advisory Process resolves each of these common shortfalls in investor expectations. This is done through the continuous application of key management principles and practices, all focused on meeting these and other client expectations.

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