Estimated reading time: 0 minutes 45 seconds
Step 1 - Establish the investor's return and risk objectives from the current financial status, desired goals, risk questionnaire.
Step 2 - Establish the investor's constraints - Liquidity, Time Horizon, Taxes etc.
Step 3 - Determine investor's strategy for investments based on the return and risk objectives, constraints, suitability of an asset class and investments, historical data and market expectations.
Step 4 - Determine investor's asset allocation that is most appropriate for meeting the return and the risk objectives.
Step 5 - Execute investor's financial and the investment plan by following the portfolio recommendations.
Step 6 - Track the investor's plan and evaluate performance of the investments at regular intervals.
Step 7 - Make updates to investor's plan and investments. The adjustments are needed to ensure that the plan and the investments continue to be aligned to the return and the risk objective. Any updates in the personal circumstances of the client need to be incorporated in the plan.