Deriving product specifications for investment advisory services as a first step towards pricing

This paper presents an approach to derive product specifications for investment advisory services. The aim is to make investment advisory services independent products, providing a service model that can be priced. The study resulted in an object-oriented framework for a catalogue of service specifications, called service modules. The approach combines the investment process with general elements of advisory services. This combination allows one to distinguish the advisory aspect, which describes the distribution of the roles between customer and advisor, independently from a standardized approach to asset management, as represented by the investment process. Service modules enable the standardization, differentiation and a modular specification of advisory services without constraining individual customization. Although the focus of this paper is on the product specification, it gives an outlook on how service modules could be used for pricing.