Investment Insight
by Ted Ponko, CFA

Superior mutual fund evaluation and portfolio recommendations begin here. 

Innovative Approach to Profiling Increases Client Confidence

Many investors desire high return and low risk, along with high levels of current income and liquidity. While these are understandable goals, they are not practical. Traditional client profiling and suitability processes simply average these conflicting objectives, usually yielding a "balanced" portfolio recommendation. But this approach does not assess the importance of each objective to each client. reducing their confidence in the portfolio and ultimately their advisor. Klein Decisions' K⁴ Portfolio Selection actually resolves the conflicts in the investor's objectives for a portfolio match that considers the objectives and their importance for that particular investor.

CAPTURES THE INVESTOR'S OBJECTIVES AND THEIR IMPORTANCE

Unlike other profiling systems that merely focus on desired levels of risk and return, K⁴ Portfolio Selection also considers the importance that investors place on each goal yielding a more accurate characterization of their actual objectives.

STRENGTHENS ADVISOR-CLIENT RELATIONSHIP 

Simply averaging results from conflicting objectives results in thinking everyone is average. The patented "K⁴ Process" actually resolves conflicting client goals on the front end, avoiding misunderstanding that can undermine the advisor-client relationship.  

increases the likelihood of meeting client objectives

K⁴ Portfolio Selection turns the traditional process of assessing risk vs. return around to include the necessary third dimension- investor priorities. Once the investor's objectives are determined, conflicts are resolved, and weights are assigned, all available portfolios are scored for fit with the investor's weighted objectives. The focus is on the investor's objectives and priorities not just the risk and return of the available portfolios.

CLEARLY DOCUMENTED PROCESS MEETS ANY COMPLIANCE CHALLENGE

Investor suitability and profiling are two distinctly different issues. K⁴ Portfolio Selection handles both in one, simple, visually appealing interface, yet still distinguishes between the two processes. The result is a well-documented agreement that establishes suitability and and effective client communication.