Ever-Increasing Efficiency

March 1, 2017

For those of you who have been in this business for a decade or longer, how much more efficient is your business today than it was when you began?  I suspect that the answer to that question is “much more efficient.”  Why?  Because those advisors who failed to innovate and streamline their business are likely already on to a different career.  We are all aware of just how much competition there is in this industry and have seen the general trend in lower fees and increased automation.  Yet, in my humble opinion, there is still no better place to be.  In fact, for the advisor who is on the right side of these trends, who continues to find ways to operate more efficiently, and continues to increase their value proposition to their clients, the future is as bright as ever.

While recently reading Martin Ford’s book Rise Of The Robots, I came across the following passage which speaks to the pace of innovation and ever-increasing efficiency in our economy.

In 1988, workers in the US business sector put in a total of 194 billion hours of labor.  A decade and a half later, in 2013, the value of the goods and services produced by American businesses had grown by about $3.5 trillion after adjusting for inflation—a 42 percent increase in output.  The total amount of human labor required to accomplish that was…194 billion hours.  Shawn Sprague, the BLS economist who prepared the report, noted that “this means that there was ultimately no growth at all in the number of hours worked over this 15-year period, despite the fact that the US population gained over 40 million people during that time, and despite the fact that there were thousands of new businesses established during that time.”  (Shawn Sprague, “What Can Labor Productivity Tell Us About the U.S. Economy?,” US Bureau of Labor Statistics, Beyond the Numbers 3, no. 12 (May 2014)

Kind of amazing, isn’t it?  42% more output with the same amount of human labor.  As you look at your business today, what parts need to become more efficient?  Marketing, reporting, compliance, investment management, customer service, client onboarding?  Perhaps, a little of all of the above?  While we don’t profess to be all things to all people here at Dorsey Wright, we can make a major impact on your investment management process.

Let me suggest 3 ways that Dorsey Wright can help your business become more efficient.  This is by no means an exhaustive list, but it does include some which I believe to have the most potential to take your business to the next level.

  1. Become an expert in implementing one or more of the following tools across your client portfolios: Team Builder (to employ a process for defining your investment inventory and then building a diversified allocation while selecting best of class funds), Portfolios (to track your current holdings and to receive alerts when any of those holdings fall below an acceptable technical attribute of fund score), Tactical Tilt (to enable tactical shifts within strategic boundaries), Models (to put to work pre-built sector rotation, fixed income rotation, or country rotation models),  Matrix Plus (to facilitate the automation of buy and sell decisions based on relative strength rank within a customized investment universe).  Each of the above tools are scalable, giving you the opportunity to provide world class investment management in a time-efficient manner.
  2. Leverage the expertise of Dorsey Wright’s Systematic Relative Strength Portfolios.  Perhaps, part of becoming more efficient for your business is to outsource some of the investment management to a 3rd party money manager–especially to one whose investment process is one that you believe in.  Click here to see a list of SMA/UMA platforms where these portfolios are currently available.  E-mail andyh@dorseymm.com to receive the brochure.
  3. Leverage the expertise of Dorsey Wright through the use of ETFs or mutual funds which DWA is involved in managing.  Click here for the list of options.  These products give you turn-key access to relative strength strategies, driven by Dorsey Wright’s global technical research.

I suspect that that success as a financial advisor in the future will require the capability to continually streamline your investment management process in a way that is clearly differentiated from the competition.  Dorsey Wright research tools and managed products can be instrumental and foundational in that effort.

The relative strength strategy is NOT a guarantee.  There may be times where all investments and strategies are unfavorable and depreciate in value.

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