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How To Use Active Management Products In Your Client’s Portfolios

·3 min read

The past year-and-a-half of pandemic life found investors of all types exiting an unstable market, choosing to live in the moment with their finances as they entered truly unprecedented times. However, as the global economy continues its recovery, it seems people are willing to invest in their futures once again—or, for some, for the very first time. It’s important to understand, though, that how your clients are investing can be just as important as how much they put in.

As an advisor, you want to maximize growth the best as you can for your clients. You’re always looking for new ways to improve their assets. Though times of economic uncertainty have a tendency to steer people towards making conservative, slow-building investments, an active management strategy has the potential to put clients on a better path to growth through an innovative, hands-on approach

In partnership with Franklin Templeton, we list just a few of the ways advisors can take on an active approach for their investors.

The real-time savvy of ETFs

While traditional market capitalization-weighted index products sit back and track indices, an Exchange Traded Fund (ETF) aims to outperform those same indices through active management. Managers achieve this by tracing market changes throughout the trading day, and making adjustments to a client’s portfolio by buying and selling securities in real-time. While there’s no doubt an additional risk to fine tuning a portfolio on-the-fly, there’s likewise potential to see additional growth using an engaged, active strategy that further diversifies your clients’ assets while considering the complexities of an always-evolving market.

Invest in innovation

Traditional passive investment models are time-tested, proven portfolio-growers. After all, modeling a portfolio on a generally stable index is a way to trace income growth reliably. Investors run the risk, however, of building their wealth too slowly with these kinds of conservative investments. Advisors, meanwhile, could suggest a more modern solution through strategies like an Innovation Fund, which invests in sustainable, innovation-driven growth prospects. The diversified, global growth equity strategy provides exposure to developing tech and e-commerce sectors, and likewise has a keen eye on genetic breakthroughs. If you’re looking to plan out your client’s financial future, it stands to reason they may want to invest in the industries of tomorrow.

The tailored approach of SMAs

Unlike traditionally grouped funds, a Separately Managed Account (SMA) puts ownership of stocks, bonds, and other securities directly into the hands of an investor. This offers a greater chance to build a unique, financially flexible portfolio based around an investor’s goals and values. It also allows for greater control since there won’t be any other shareholders directly impacting or potentially depreciating the value of your client’s tailor-made plan (either by buying into or selling off shares).

A financial advisor can connect their clients with an SMA manager dedicated to maximizing the value of a custom, diversified investment strategy. Using their professional expertise, they can assist in building a unique, active approach that considers investor values, market changes, and more.

Connect with a Franklin Templeton manager today

Franklin Templeton’s team of strategists has been delivering income solutions to investors around the globe for over 70 years. Connecting with one of their experts, you can review your client’s assets and build out a unique plan that considers their income challenges, investment expectations, risk-tolerance, and whether an active strategy can be the right fit. You can find out more about how Franklin Templeton are actively solving income challenges over here

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