Centralised Investment Process

Question 1

Explain what is meant by a Centralised Investment Proposition (5)

Answer 1

• standard investment approach
• segmenting clients into risk categories
• model portfolio/ assets allocations
• based on investment theory
• periodic reviews

Question 2

Advantages of Centraliaed Investment Process (3)

Answer 2

• eliminates portfolio drift
• removes advisor bias
• matches ATR

Question 3

Disadvantages of Centraliaed Investment Process (3)

Answer 3

• one size fits all
• additional taxation due to higher portfolio turnover
• past data underpinning model portfolios maybe incorrect