Maddi Dessner, Head of Asset Class Services for Capital Group, joined Keith Black, Managing Director of RIA Channel, to discuss how advisors can interact with Capital Group’s portfolio construction team.
Capital Group’s portfolio construction team includes 15 professionals, including those holding PhDs and/or CFA and CFP charters, who can meet with advisors. In 2023, the team conducted over 10,000 portfolio reviews. The portfolio construction desk can help advisors with talking points to discuss investment issues with clients. Capital Group finds two common issues when reviewing advisor and client portfolios. First, the portfolio construction team often sees portfolios predominately invested in US markets. To overcome this home-country bias, the team encourages greater diversification into international holdings. Second, conservative portfolios often have more exposure to credit risk than advisors may realize.
Capital Group has surveyed investors on how money is spent in retirement. Investors don’t realize how long their portfolios will be needed to provide retirement income or the amount of drawdown they likely need to tolerate to meet their financial goals. Retirees need a better understanding of principal protection in portfolios and how much can be left to their heirs. Model portfolios provided by Capital Group include income-oriented strategies that can help retirees with longevity risk.
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