Client Success

Persistent delivers a dynamic portfolio suitability platform that empowers investors to make safe, compliant, and informed investment decisions

The client offers fully automated all-in-one compliance platform for the global investments industry. They serve financial services providers with automated compliance solutions that enable regulatory protection, reduced risks, and brings down the operating costs. They aim to deliver thorough, unparalleled expertise in risk and compliance experiences to their customers.

Need for a holistic platform that safeguards investors’ interests, makes better investment decisions while keeping portfolios compliant.

In current fluctuating, chaotic financial environment, finding attractive sources of income through investment portfolios has become more of a challenge than opportunity. Investors hire advisors for their experience and knowledge in areas they do not have enough knowledge about and expect them to give quality advisory services and do what is in their best interest.

The client wanted a solution that could help advisors continually measure and monitor an investor’s portfolio to make sure that the investments (securities, holdings, shares, etc.) are well aligned with their objectives and works in best interest of the investor. The solution needed to be dynamic enough to match the fluctuating financial market conditions with changing objectives.

The client chalked out the following listed challenges that were hindering their way to achieve a robust portfolio suitability system, the challenges were :

  • The system needed to provide a clear, transparent, and comprehensive view of a portfolio: The client wanted a solution that could give a clear visibility into an investor’s portfolio, accurately compare current portfolio risks with investor’s risk appetite, run ad-hoc suitability checks, visualize historical investment strategies, and risks involved or expected returns on an investment.   
  • The system needed to make sure portfolios are compliant with regulatory mandates: The client needed a system that could assist advisors with enriched market, historic, and reference data and sophisticated technologies to achieve compliance with regulations such as FINRA and SEC.
  • The system needed to safeguard investor’s interests: One of the most crucial aspects of portfolio suitability is to maintain investment assets in line with investment objectives while understanding an investor’s risk profile. Some of the many speculated important facets to be considered while making investment decision on behalf of the investor can be – age, income, risk tolerance, and investment experience among others. Apart from that, the client realized that in some scenarios brokers often overcharge investors by selling them investment products where they can collect hefty commissions. To address that, the client wanted the system to make sure brokers selling investment products must adhere to the ‘suitability’ standard.  

The client needed a solution with an interactive interface that enabled users (financial advisors and investors) to leverage investment suitability, portfolio monitoring, and risk management as their advantage.

Investment suitability, portfolio monitoring, and risk management becomes easy to leverage

As the client’s technology advisor, we delivered a Portfolio Suitability System, which is now robust, easy-to-use, scalable, and dynamic. The solution helps set out the guidelines to match the risk profile of an investor by considering parameters like age, income, investment experience etc. to the investments made within the portfolio by their portfolio manager.

The solution provides a powerful platform to cater core functionalities that are critical to achieving suitable portfolios. The solution helped the client :

  • Give a holistic view into the diversity of the portfolio and highlight risks involved: The solution accurately compares investments with investor’s risk tolerance and investment objectives which works in best interests of the investor.   
  • Flag inappropriate / suspicious transactions:  The solution scans the components of each portfolio and compares it with the investor’s profile. The solution detects suspicious transactions and its level of violation (signaled with red, yellow, and orange) and reports when investments or trades fall outside of suitability, regulatory mandates, or investor’s objectives and interests.
  • Ensure investor’s interests are safe: Keeping investor’s financial data secure while ensuring that while making investment decision on behalf of the investor, their profile details such as their annual income, age, amount of taxes paid, investment experience, and risk tolerance is precisely considered. For example, if an investor is 60 years old with a fixed income, their portfolio should be a conservative portfolio and not a risky portfolio.

Thousands of financial advisors and portfolio managers trust the solution to monitor hundreds of thousands of accounts. Processing each account’s trading activity manually could have resulted in more errors and lesser accuracy in achieving suitability. The solution helps the client and its patrons ensure that the portfolio manager conducts trade in accordance with investor’s preferences and profile, and makes investment decisions appropriate to their risk/trading profile.

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