This paper examines decision-making processes in the context of an investment and financial advisory career. Drawing on Laudon and Laudon's decision-making framework, the paper distinguishes between structured and unstructured decisions. Structured decisions — such as building a client investment portfolio — follow defined phases: intelligence gathering, design of possible solutions, and ongoing implementation. Unstructured decisions — such as identifying which potential customers to pursue — rely more heavily on advisor experience, judgment, and contextual factors. The paper illustrates how both types of decisions draw on different kinds of information and analytical tools, and how mastery of each can provide a competitive advantage in financial services.
The career examined here is that of an investment and financial advisor. This position involves working within the context of a bank or financial services firm, serving a set group of clients as a broker. When determining investments for clients, relevant information comes from multiple sources: the client, the employing company, and the broader markets. The investment decisions made with or for the client are expected to reflect this information. That said, many people do not use rational, informed decision-making when making their investments, which makes the advisor's role all the more important.
A structured decision with respect to building an investment portfolio follows the framework described by Laudon and Laudon (2006). The initial phase is intelligence. An investment advisor would already have performed intelligence research on different types of investments and maintained a working list of favored options. However, intelligence must also be gathered from the client in order to define the problem. The problem, in this context, is essentially the client's investment objectives — for example, a person may want to build a large retirement fund while also setting aside money for their children's college education. This information is gathered through structured client inquiries, and having a standardized methodology for this process is beneficial.
The next step is the design phase, in which possible solutions are identified. The ultimate solution will differ for each client, but decisions tend to follow some basic formats. These options must then be narrowed down to find the most appropriate fit. This process begins with a near-infinite array of possibilities and concludes when the client has a completed portfolio of specific securities. To reach that outcome, the advisor and client work together to select the best solution. Typically, the advisor presents a shortlist of options, and a discussion follows about which best serve the client's goals. Both the client and the advisor influence this process.
Finally, the implementation phase is where the advisor tracks the performance of the portfolio, evaluates whether it is meeting the client's needs and performing as expected, and makes periodic adjustments — effectively new decisions — to continue addressing the client's objectives over time.
"Data sources, analytics, and dashboards used by advisors"
"Judgment-driven decisions in prospecting new clients"
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