Standardisation in the Retail Banking Sector Designing Functions for an Individualised Asset Allocation Advisory
This article is about individualising the process of giving advice to a retail customer in the field of asset allocation. With regard to this process, two main contributions are made by answering two questions. First, which objectives are relevant for a customer (beyond return and risk) and which functions are adequate to evaluate portfolios of investment alternatives with regard to these objectives? Based on empirical literature on customers’ goals, the four objectives liquidity, variability, comprehensiveness, and manageability are identified as relevant. The background of each objective is discussed in order to formulate desirable properties of the objective functions. These properties are then used to axiomatically identify particular functions from fuzzy theory suitable for the given context. The second question is: which selection function is adequate to select a particular portfolio out of a set of portfolios? To answer this question, again an axiomatic approach is chosen: Several properties are discussed and stated which shall reflect the customer’s decision calculus. By requiring these properties, the selection function can be exactly specified. The results can help financial services providers in two ways: On the one hand, they can provide their customers with a higher quality of their advisory services by taking into account more objectives than return and risk. On the other hand, as the derived functions are standardised, they can be used in software applications to support the advisory process which can then be offered at lower costs and thereby even to retail customers.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
When requesting a correction, please mention this item's handle: RePEc:kuk:journl:v:47:y:2014:i:1:p:103-161. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Credit and Capital Markets)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.