Page 23 - PIC Magazine Issue 25 - Autumn-Winter 2025

Benchmarking
The financial adviser’s
‘challenging friend’
All of us need a challenging
friend; that person who can
firmly (but kindly) help us to
bring clarity to our goals, as well
as help us to celebrate honest
success. For financial advisers,
the art of benchmarking may
just be that friend.
A fi nancial adviser needs to know exactly
what their client wants out of an investment
solution, and wants to be able to be open
and honest with clients about when those
solutions meet expectations, as well as when
they don’t. In the world of fi nancial advice,
benchmarking serves to both compare the
performance of the investment solutions you
are recommending to your clients against
other solutions in the industry, as well as
compare the expectations of how we feel
those portfolios should be performing. In
other words, it helps us to ensure that we’re
providing the right solutions, with the right
outcomes for clients.
The FT Philosophy
Each fi nancial adviser will approach provision
of advice separately and recommendations
on investment solutions will be made on
both risk profi ling clients and a full and frank
discussion about what the clients’ needs
are. As we work with vulnerable clients,
this is a vital part of the process. Once we
understand a client’s position, we can then
go on to make appropriate recommendations
for investment solutions. As we work with
vulnerable individuals, the “how we believe
our recommendations should be performing”
is perhaps diff erent than other advisers.
Where other advisers might favour riskier
solutions that provide bigger returns but have
greater volatility, we recommend solutions
that account for a reduced appetite for
risk and are less less volatile over the long
term. In order for us to determine what is
appropriate to recommend for our clients, we
use benchmarking tools that provide us with
access to insight from investment houses.
Although there are several independent tools
we can access, our preferred tool is ARC –
Asset Risk Consultants.
Why ARC?
Although it is not possible for us to access the performance results
from each investment house directly, ARC collates data from 146 DFM
(Discretionary Fund Manager) providers, assessing the performance of all
of their portfolios. It then provides quarterly performance averages. We
prefer ARC because they have the largest amount of contributors, so they
produce a more well-rounded view than those with fewer contributors.
The Frenkel Topping investment committee uses ARC’s benchmarking
data as part of a broader discussion with our advisers considering what
portfolios are best recommended to our client base. These discussions are
regular, ongoing and recommendations are reviewed routinely.
One size doesn’t fi t all
It’s very important to us to have
multiple DFMs that we can
recommend to clients, because we
know very well that one size doesn’t
fi t all. Providing clear options for our
advisers to talk through with clients
is vital and benchmarking is a part
of the process that empowers us
to provide those options. So having
those full and frank discussions with
a client at the outset of their referral
to us, and learning the nuances of
a client’s situation, is vital because
we can then take our learnings
away and, incorporating our
benchmarking philosophy, make
recommendations that we believe
are relevant to our clients.
We also keep reviewing the fi nancial
advice we’ve given our clients on
a regular basis. Peoples’ individual
circumstances change over time,
and so our advice needs to match
that. Benchmarking supports
our discussion as it enables us
to compare a client’s current
solution to others, but we use it as
part of a broader review that also
incorporates, for example, our
understanding what a client’s current
circumstances are, their ability to
withstand fl uctuations in the value of
their portfolio and our viewpoint on
market outlook. It all goes back to
making sure clients get advice that
gives them a best in class solution,
and that they have the context
provided to understand what our
advisers believe that solution is right
for them. That challenging friend
will continue to keep our advisers
alive to just how well suited those
solutions are, and continue to be
for clients throughout the lifetime
for clients throughout the lifetime
of relationship
of relationship
with them,
with them,
helping us
helping us
to do the
right thing by
right thing by
our clients,
our clients,
always.
Mark Holt, Managing Director –
, Managing Director –
Frenkel Topping Limited
COO – Frenkel Topping Group
COO – Frenkel Topping Group
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