Porfolio Optimization Service

Portfolio Optimization is a disciplined process that offers individuals access to the same type of sophisticated software programs that billion dollar pension funds utilize.  Optimization seeks to improve the overall risk/return profile of an investment account... ‘In other words, as an investor, how can I reduce risk, increase downside protection, and improve overall portfolio returns?’

Optimization or effective diversification is a method of reducing risk, and generating above-average, risk-adjusted returns.  Successful diversification involves bringing together different investments that complement and enhance each other.  This can be used for both registered and non-registered accounts.

The intent of effective diversification is to lower portfolio volatility.  Return enhancement is often a byproduct of this process. 

“The idea is that if you’ve got a risk budget-you only want to be exposed to a certain amount of risk-then diversification should allow you to obtain a higher return when spending that risk budget.”

Dr. Peter Klein

Director of Simon Fraser University ’s Global Asset and Wealth Management Program

 How it works...

The process identifies poorly performing funds in the portfolio that individually offer inferior risk/return profiles, and behave similarly to other funds within your account.  We then recommend substitutions that are superior on an individual basis, and secondly improve overall diversification.

We also identify funds and asset classes that are far too risky (volatile) on an individual basis, and that are unsuitable for the client’s risk tolerance.    

The result is normally less funds inside the account, less volatility (risk), higher return potential, and improved downside protection. 

How to get started…

If you are an existing client of Banwell Financial Inc., simply request the process and email or fax us statements of accounts held outside of BFI. 

If you are not yet a client of Banwell Financial Inc., we recommend an introductory meeting before starting the process.  This allows us to describe who we are and what we do, and more importantly, get to know you as a person, what type of investor you are, and also learn about the goals and objectives of your investment accounts.

This will help to determine your individual ‘risk budget’.              

When we proceed with the optimization we will provide you with a written summary outlining redundant funds, poorly performing funds, and recommendations for going forward.  There is no cost or obligation for this service.   

“Although the intent of our process is to optimize portfolios, the tangible benefit is an account that is far more appropriate for client needs.”

                                                             Michael Banwell, CFP

                                                            Banwell Financial Inc.