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Optima Group’s Annual Look Ahead

Another year is coming to a close, with all of the accompanying fanfare and festivities, including our annual perspective on key themes and trends for the coming year.

1. Goals-based investing This seems to be one of the big buzz phrases of the past year. Many organizations are moving to an investment approach that considers separately the unique and multiple goals of individual investors. This allows investors to more accurately prioritize their goals and define the time horizon and risk profile for each goal. The key challenge firms face is in communicating this approach; defining the process and measuring success.

2. Active versus passive The debate surrounding active versus passive investment management continues to heat up, with passionate supporters (and detractors) on both sides. Perspectives range from those who firmly believe that:
• Active can add value, particularly in times of drawdown, or for investors who embrace managers willing to deviate widely from a benchmark
• Passive provides the lowest cost and most efficient solutions
• A mix of active (for satellite strategies) and passive (for core) can help to control costs and use active management only where the cost is justified
• Enhanced passive can provide the best of both active and passive

3. “Money in motion” As baby boomers continue to age, there is renewed attention on the movement of wealth. Research has shown that money moving to a widowed spouse or on to the next generation is at significant risk of jumping providers. Organizations are realizing the importance of getting to know and interacting directly with those who will inherit their current clients’ wealth. This must be done in an appropriate and highly engaging manner.

4. Adding value to relationships Organizations are increasingly realizing the need to add value in their interactions with clients. This includes the personal, client service aspect, as well as enhanced communications. A key component is providing perspectives on relevant issues in easily digestible “snippets” on a regular basis to help stay top of mind.