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Asset allocation is a key driver of quality portfolio construction, and quality results for investors. farrelly's Investment Strategy - the first independent, specialist asset allocation research service for investment advisers - is available exclusively through PortfolioConstruction Forum.
Who is farrellys?
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farrelly's is the Australian financial services industry's
first dedicated asset allocation research house. It was established by the
principal, Tim Farrelly, in 2004 to help advisers make superior asset allocation
decisions for investors. Prior to founding farrelly's in 2004, Tim was an
Executive Director of Macquarie Bank Ltd, and Director of Macquarie Investment
Management Ltd. At various times during his 14 years at Macquarie he sat on the
MIML Asset Allocation and Risk Committees, and was responsible for distribution
of the Bank's products through independent financial planners and stockbrokers.
While at Macquarie, Tim was responsible for the Long-Term Forecasting program in
2000 which foreshadowed the bearmarket in US equities. Tim has a MBA
(Distinction) from the Harvard Business School and a Bachelor of Engineering
(Met) from the University of Melbourne. The farrelly's approach to asset allocation is compatible with how investors really think, and what they want. Portfolios are constructed to meet the investor's needs - the first step in portfolio design is to work out what the client wants and needs to achieve. It's not about asking clients their age or how aggressive they feel, so they can be squeezed into a preset box. Return forecasts are forward-looking - in stark contrast to most of the industry, farrelly's asset allocation models are based on long-term, forward-looking forecasts. Risk is the chance of not meeting the investor's needs - poor long-term returns are the major risk facing investors. Excessive volatility is a secondary, important risk. Tracking error or institutional business risk shouldn't enter into the equation. There's more than one way to skin the cat - most of the time, there are many, equally valid asset allocations to achieve the investor's required outcome. While the asset allocation design must be underpinned by a set of rigorous principles and calculations, the final choice will come down to cost, risk, and personal preferences, to produce a portfolio that makes sense to the adviser and client.
Transaction costs and taxes matter - taxes and
costs can consume half or more of total investment returns, so decisions to
change asset allocations should take them into account, carefully weighing up
the benefits.
Proactive Asset Allocation Handbook - the quarterly
Proactive Asset Allocation is published electronically, and emailed to
subscribers in early March, June, September, and December. It features: Proactive Asset Allocation Implementor - best suited to those subscribers taking the bespoke approach, this Excel-based software is updated quarterly and allows subscribers to adapt the Benchmark Asset Allocations to your clients' unique circumstances. Proactive Asset Allocation Wizard - a much simpler version of the Implementor, this Excel-based software is best suited to those using the Directed or Advised approach. Updated quarterly, it allows subscribers to adapt the Model Allocations to your clients' unique circumstances. It automatically recommends how to place both new money and what changes should be made to existing portfolios. Proactive Asset Allocation Presentation - Updated quarterly, this investor-friendly presentation includes a variety of slides that cover the basics of the farrelly's philosophy (we don't anticipate that you will use every slide with every client). Proactive Asset Allocation Q&A - Features questions received from subscribers each quarter, which we publish for the benefit of all subscribers.
Proactive Asset Allocation Profiler - a simple tool that
allows subscribers to determine clients' financial risk tolerance and match that
to the farrelly's Model Allocations and Benchmark Allocations. farrelly's Investment Strategy is available by quarterly subscription, payable by credit card.
Australian residents
$350+GST per quarter
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