Season’s Greetings From Cornerstone Portfolio Research- Your Outsourced CIO Source

Season’s Greetings From Cornerstone Portfolio Research- Your Outsourced CIO Source

As we close out 2022, the team at Cornerstone Portfolio Research would like to extend our cheeriest season’s greetings to you and your loved ones. May your holidays be warm, bright, and peaceful. 

If you’re an independent broker-dealer or RIA navigating our seemingly ever-fluctuating market, consider gifting your firm with the benefits of selecting an OCIO. You need the right partner for guidance along your financial journey—and that’s where we shine. 

As an outsourced chief investment officer (OCIO) provider, we are an affordable, reliable source for all the experienced insights your team needs. We’re also fluently up to date regarding Reg-BI, so we can help you keep both well-documented and thoroughly compliant. 

This article covers these topics:

  • The wild ride that was 2022 is almost over
  • How 2023 might be navigated more easily
  • Could an outsourced CIO have helped?
  • Relaxing holidays are the best ones

The Wild Ride That Was 2022 Is Almost Over

This year has been an intense and tumultuous one. Between a turbulent stock market, new regulations, and changing investor sentiment, there has been plenty to keep track of from January to now. In fact, market turbulence posed a rare challenge to many financial firms.

As inflationary pressures combined with extreme volatility, the unusual convergence led to a complex economic environment that sometimes seemed more uncertain, the further we went. Many investors had long been accustomed to moderate inflation rates and stable markets. As a result, these conditions marked the start of new trends that caused considerable disruption for independent broker-dealers, RIAs, and much of the financial industry.

From significant losses due to volatile securities prices—to a skyrocketing interest rate environment, every month seemed to present innumerable obstacles for investors wishing to preserve assets or meet performance goals. Financial firms responded by widening their offerings and implementing diversified strategies across asset classes, hoping to minimize losses on individual assets, if not see returns for clients. 

Nevertheless, many asset managers had lingering concerns about investor retention. When market prices plummeted, many clients panicked and wanted to withdraw their investments. This prompted some broker-dealers to take extra steps to retain their clients. 

Fears of a long recession drove some investors away from traditional investments, forcing wealth managers to adapt quickly in order to remain competitive. At the same time, others sought creative methods of client re-engagement as a means of convincing skittish investors to stay with them. Clearly, many independent firms managed to continue providing value, but at times, it felt like an uphill battle.

How 2023 Might Be Navigated More Easily

Fortunately, as we head into 2023—which could be another historic year in its own right—remembering the challenges and successes that defined 2022 may yield insights for use on the road ahead. Leaders can apply lessons learned and leverage resilience strategies for what could be more successful operations. 

For example, this could mean focusing on cutting costs, strategically managing liquidity risk, increasing transparency, and connecting with clients on a more personal level. Making thoughtful investments in these areas may contribute toward lessening the impact of the ebbs and flows of sometimes-squirrelly market conditions. 

Unfortunately, this isn’t all that you need to adjust and prepare for. Reg-BI was also a major shift for independent broker-dealer firms in 2022. Increased regulatory oversight and risk management reform taught firms to improve their operational processes. The SEC, FINRA, and the public want better customer disclosures, so like it or not, a greater focus on compliance will be essential to success.

If you haven’t already, Reg-BI will require investment in training, technology, and processes to make sure that you’re staying compliant and up to date with its requirements. Additionally, everything has to be extremely well-documented to prove your compliance and demonstrate the knowledge you’ve accumulated to clients. 


RIAs: Are You Ready To Compete on the Next Level in 2023? We’re Ready To Help Make It Happen.


Could an Outsourced CIO Have Helped?

Believe it or not (especially during the holidays), there’s reason to be optimistic. For starters, it’s not all bad news. Although 2022 could be a mean teacher at times, remembering one particular lesson it taught may lead to some firms having a much better year: Working with the services of an outsourced chief investment officer (OCIO) could have made meeting 2022’s Reg-BI compliance demands significantly easier. 

With an OCIO specialized in compliance at the helm, monitoring Reg-BI documentation could become hassle-free. The right external CIO will offer a comprehensive portfolio due diligence that includes tailored monitoring technology, up-to-date reporting tech, and reliably clear Reg-BI paperwork. 

The appointment of an OCIO that is also a Chartered Financial Analyst® to your team can provide immense value to the firm, through both retention and attraction of new clients. A CFA® charterholder’s credentials demonstrate extensive knowledge of financial operations on many levels. From their strong knowledge of Reg-BI compliance to qualitative and quantitative analysis abilities, your potential outcomes from business strategies and initiatives are likely to benefit. 

And yes, I mean the to-your-team part: Although the OCIO meets with your staff (and, if you like, your clients) online, you can list him or her on the Our Team page of your firm’s website. You can have all the additional horsepower under your hood that a seasoned financial industry executive can bring—without paying the bonuses and benefits a physical full-time hire would require. 

The right candidates tend to come with no rock-star egos, as well. The idea is to integrate into your team and increase your capacity, never to disrupt your processes or cohesion.

Relaxing Holidays Are the Best Ones

Happy holidays from Cornerstone

An outsourced CIO can be a gift to your firm (and clients) that keeps on giving. This helps—because the holidays never seem to last for long. You should remember to relax and enjoy the downtime, even if future Reg-BI compliance doesn’t always make it seem easy. 

By relying on a knowledgeable professional to assess and help maintain your firm’s compliance, you can be confident that the SEC’s standards are being reliably maintained. Meanwhile, you can focus on creating a happier new year for yourself, your clients, and your prospects. Contact us to learn more. 

P.S. We have new content inbound for January. Get ready to ignite your 2023. 

CPS eBook Reasons to Outsource

More about the author: Thomas Balis

Thomas holds a Bachelor of Science in Business from Ohio State and has since earned the Chartered Financial Analyst® (CFA®) designation as well as the Accredited Portfolio Management Advisor (APMA®) and Chartered Mutual Fund Counselor (CMFC®) certifications.