A common concern investors have when working with an investment professional is how that individual selects the investment products he or she recommends or otherwise utilizes for client accounts. Some firms may have exclusive relationships with certain fund companies or other investment managers and only select from those managers’ products for their clients.
BOK Financial uses a different approach called “open architecture.” This means that its portfolio managers can select investments from a full range of options — utilizing only the ones that most closely meet their clients’ needs and expectations.
“When you come to BOK Financial, you are not just going to have proprietary products, but access to a broad range of investment options from across the industry,” says Clint Dishman, Senior Vice President and Manager of the Strategic Investment Advisors group at BOK Financial, the parent company of BOK Financial. “We pride ourselves on finding what we believe to be best-in-class managers for each type of investment and making those managers’ products available to our clients.”
A Research-Driven Approach
Although a growing number of investment professionals today tout using an open architecture approach, we take a more focused, research-driven approach to identifying high-quality investments that fit their client’s unique needs. A team of specialized investment analysts identifies the top managers in each investment category, Dishman says. The team then thoroughly investigates and vets each manager’s process and performance to create an offering of the most competitive managers for each investment category.
For example, the research team generally identifies what it believes to be the three or four best-in-class managers for different types of investments, from short-term U.S. bonds to emerging markets to those that use specific alternative investment strategies. This comprehensive offering of preselected investments is made available to our investment professionals as they help identify investments for client portfolios.
“We allocate significant resources to build and monitor our investment offerings,” Dishman says. “We have created a proprietary process for both our manager research and our ongoing due diligence.”
When selecting investments, the research team not only looks at each manager’s process, philosophy and experience, but also utilizes a proprietary system to evaluate 14 key performance-related metrics, including risk-adjusted returns and consistency of results. The research team also closely monitors the performance of all preselected investments and will place on heightened review status or replace those that do not meet performance standards or the team’s rigorous expectations with respect to the managers’ investment process.
“We look for managers who can achieve competitive risk-adjusted returns at a reasonable expense to our clients,” Dishman says. “We want managers who are consistent and have a repeatable process.”
Portfolio managers at BOK Financial also have access to proprietary products that clients can choose if they wish.
How Our Clients Benefit
Our research-driven approach to open architecture ensures that our clients can feel confident that investment managers are carefully vetted and that their portfolio manager has ample options available to meet their investment needs.
As always, BOK Financial investment professionals adhere to the fiduciary standard, meaning they are working in their clients’ best interests — not their own. Providing clients with open architecture through an unbiased approach is one way they uphold that standard.
Dishman says the intense research and evaluation process differentiates BOK Financial from other investment firms that offer open architecture in a less-specialized way. “While open architecture is something people hear about more and more, it is the research and due diligence we do that really sets us apart,” he says. “It is one thing to say you are open architecture; it is another to deliver on it in practice and have the huge level of commitment that we have made.”