Twelve investment consultancies, operating within the $10 billion in assets under management of the American Investment Group, announced the launch of the Net Zero Investment Consultants initiative on Monday. The move is aimed at improving management effectiveness across all the institutions that form part of the AIG Group. According to the group, this effort is aimed at developing strategies to ensure that savings are made and risks are mitigated as much as possible. The new measures and structures will allow the institutions to focus more on the day-to-day operations and less on long-term analysis.
The Net Zero initiative is in place to help institutions improve their performance, according to the AMEX Group, a world leader in financial advisory. “As institutions become more focused on reducing costs, productivity, market share, and risk management, they need to upgrade their services to be competitive in the global economy,” said John P. Combs, president and chief executive officer of AMEX. “Net Zero should provide a competitive advantage for investment consultants, who have the expertise to identify opportunities and to translate them into opportunities for their clients.” While the Net Zero initiative may seem complicated, investment consultants may find it to be advantageous.
Under the new structure, investment consultants will be required to provide a benchmarking service to their clients. This benchmarking will ensure that the institution is on the same page with its clients in terms of objectives, strategies, and risk assessments. Further, the implementation will also require consultants to develop services that are tailored for the different sectors and markets that are being served by the institution. For instance, a bank consulting firm that handles commercial and investment banking relationships may be expected to develop tailored programs for their clients that take into account current market conditions, economic trends, and changes in regulations. Such modifications would be particularly useful for smaller and medium-sized banks, where IT budgets are limited, and where there is a tendency for clients to defer to consultants when it comes to risk assessments.
The ability of investment consultants to deliver customized solutions can also contribute to the success of their organization’s performance. This, in turn, can provide the manager with more time to focus on managing the portfolio and reducing risk. As an alternative, the manager could assign part or all of the project responsibility to a second manager who would then report directly to the principal investment banker. However, even though some investment consultants have shown flexibility in assigning workloads to the different managers, other firms have been reluctant to do so because of the need for full-time engagement with the clients’ projects.
Investment Consultants have not been immune from changing technology. In fact, many of the leading investment consultants have been forced to adapt to the rapid advances in computing and information technology. The increasing complexity of financial portfolio management and other IT-based projects has prompted firms to outsource their IT requirements to experienced software development firms. While there are a number of advantages to outsourcing IT projects, firms need to make sure they get the services of only the best developers in order to minimize the risks involved in outsourcing certain parts of their projects.
It may seem that the benefits of hiring an in-depth financial planner outweigh the benefits of hiring an investment consultant. However, it is important to remember that investment consultants are trained professionals and have a broad range of skills that make them capable of providing a wide range of financial advice to clients. These professionals are able to offer their clients a range of options, and they can also tailor their recommendations according to the client’s specific needs. When hiring an investment consultant, it is important to ensure that they have years of experience in planning, portfolio management, asset allocation, risk management, and other related financial analysis skills.