Screens, Python and 300 products: how AI is reshaping what good asset consulting looks like

Jake Jodlowski, having spent years inside the engine room of portfolio construction, brings a grounded, stone-cold clarity that only comes from having sat in front of enough investment committees to know exactly where the hard decisions get made.

Jodlowski is a partner at Atchison, the Melbourne-based asset consultancy working with superannuation funds, institutional clients and private wealth groups. His work spans advising investment committees, constructing and monitoring APLs and SMAs, and providing portfolio support for advisers and licensees.

Building to a target, not reacting to noise

Jodlowski’s approach to portfolio construction starts with modelling and agreeing on a return objective and subsequently building on from there.

For a diversified fund targeting 2 per cent alpha above benchmark, the challenge is achieving it efficiently across a portfolio of managers. That means avoiding duplicated exposures and not paying active fees for returns a passive vehicle could deliver more cost-effectively.

“We’re looking at say 2 per cent alpha in an equity asset class. How to achieve that, we potentially may use a core product, an index fund as a core, and then blend in various concentrated active strategies around that, ideally targeting and achieving a sustainable information ratio between 0.5 and 1.0.”

That core-plus-satellite approach is not new, but the discipline Jodlowski applies to it is worth noting.

Before appointing any manager, Atchison analyses historical stock-level attribution to understand where performance has actually come from. That means examining style factors, sector tilts, and whether there is genuine stock selection skill above those factors.

The difference matters enormously when building a portfolio where multiple managers need to complement rather than replicate each other.

For advisers working with model portfolios or building their own equity sleeves, that level of detailed analysis is the difference between genuine diversification and the appearance of it.

The manager underperformance question

Few topics generate more anxiety in investment committees than manager underperformance, and Jodlowski’s approach to handling it is worth understanding.

“It’s pretty difficult to sit in front of a client when, for example, value style of investing is out of favour,” he says. “But you’re still retaining the value manager within an equity sleeve at say 30 per cent of the portfolio. It just doesn’t make sense. It’s not logical.”

His approach is to look at the portfolio in totality. If Atchison still believes in a manager but their style is out of favour, the position gets reduced. The weight then shifts to whichever style or factor the market is currently rewarding, whether growth, quality or momentum. The manager conviction stays. The sizing adjusts to reflect market reality.

“We still like a manager, we still believe in value, but value’s out of favour, we’ll down-weight that manager’s allocation, take money away and allocate to, for example, the incumbent growth manager or quality manager, rather than watching capital being continuously eroded.”

For investment committees wrestling with the same question, this offers a disciplined middle path. It sits between abandoning a manager prematurely and holding a position that is dragging performance down without justification.

AI as a portfolio construction tool

Jodlowski’s more striking observation on AI concerns not the investment opportunity but how aggressively Atchison is incorporating it into its own investment consulting process.

Atchison is actively reprogramming its analytical infrastructure using Python and AI. Manual spreadsheet-based processes are giving way to systems capable of screening hundreds of products simultaneously and slicing data in ways that would have previously taken days.

“We’re now in a position to screen 300 products from an APL and slice and dice it to the nth degree just using AI,” he says.

For advisers and licensees watching technology reshape the consulting landscape, this is a development that cannot be ignored.

The asset consultants building these capabilities now will be operating at a different level of analytical depth within the next two to three years. Those who have invested in this infrastructure will pull ahead in manager selection, portfolio construction and investment committee reporting. Those who have not will find the gap widening.

The broader lesson on conviction and patience

Jodlowski’s observation, from working with financial advisers and their investment committees, is that many diversified portfolios remain structurally overweight equities after riding the 12-month mega-cap technology bull run.

Atchison is now advising clients to take some profits off the table, reduce equity exposure and build in a degree of conservatism.

For advisers trying to reconcile long-term strategic conviction with short-term positioning, that tension is familiar.

Jodlowski holds the long-term view clearly, makes incremental adjustments based on current conditions and never lets short-term performance anxiety drive decisions that should be governed by process.

After decades working alongside superannuation funds, institutional clients and private wealth practices, his conclusion is clear. Know what you own. Know why you own it. Make sure the benchmark you are measuring against is actually testing the right things for the right reasons.