Rick Eling: Perfect parts don't equal perfect investment advice

Three acts, two links

clock • 3 min read

The quality of an investment advice process is not only about the quality of its components, explains Rick Eling, it is also about how those components connect and flow together

Imagine an advice firm with an investment process built from the best possible parts - a perfect risk-profiler that never, ever misaligns clients; a clear, accurate and investable benchmark set expressed in client-friendly language; and a range of portfolios managed by Jonny Alpha-Guru, the star manager who always beats the rest. You might think such a process would be beyond reproach, that the firm's clients would always be happy and the Financial Conduct Authority would never be provoked to wrath. You would be wrong. That is because the quality of an investment advice process is not...

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