Displaying items by tag: advisors

Tuesday, 16 May 2023 07:56

Tips on Optimizing Model Portfolios

In an article for ThinkAdvisor, Dinah Wisenberg Brin shared some tips from experienced financial advisors on the best way to integrate model portfolios into your practice. The category has seen rapid growth in recent years with nearly $400 billion in assets as of January 2023 which was up more than 20% over the previous year.

In many ways, model portfolios level the playing field between large and small firms. While some clients will always require a personal touch, model portfolios can be valuable in serving clients who have more typical goals and circumstances. Additionally, model portfolios allow advisors to focus more on enhancing the client experience and growing their business rather than managing investments. 

Another advantage is that they give smaller practices the ability to leverage tools and resources of major asset managers. These portfolios are also scalable and also leads to more optimal and efficient asset allocation. 

However, one clear disadvantage of model portfolios is that they cannot be customized especially in terms of allocations, time horizon, and risk tolerance. Therefore, they may not be appropriate for clients who have special circumstances or unique goals. 


Finsum: Model portfolios are a new innovation and are exploding in popularity. Find out if they are a good fit for your clients. 

Published in Wealth Management

Alphathena, a personalized investing platform and direct indexing startup, won the ‘Best in Show’ award at the 2023 Morningstar Fintech Showcase Conference and was covered by Benzinga. Alphathena is attempting to use AI and automation to create solutions and tools for RIAs and Wealthtech platforms with a specific focus on customized direct indexing, automated tax-loss harvesting, and lifecycle management solutions. 

The conference featured 25 fintech startups that were geared towards financial professionals. Some of the major themes included AI, personalization, and improving the client experience. Another discussion point is how the wealth management industry is poised for the Great Wealth Transfer as demographics predict a tidal wave of assets from Baby Boomers to Millennials. 

In regards to Alphathena, Lawrence Johnson, the Head of Emerging Fintech at Morningstar remarked, "Alphathena, with its elegant platform and powerful engine, is an example of a growing field of innovators that have learned to harness frontier technologies to deliver better outcomes for investors."

The judges spoke highly of Alphathena’s innovative approach, potential for disruption, and strong value proposition. Currently, it can customize portfolios with ETFs and factors for personalization and performance. Its longer-term ambition is to be the solution for wealth advisors when it comes to managing the entire lifecycle of personalized investing.


Finsum: Alphathena, a startup in the direct indexing and personalization space, won the ‘Best in Show’ award at the 2023 Morningstar Fintech Conference.

 

Published in Wealth Management

In an article for AdvisorHub, Jeff Nash the founder and CEO of BridgeMark Strategies discussed what financial advisors need to consider when they are thinking about switching firms or shifting to a different business model. 

He recommends that advisors start with the basics which means thinking about your current level of satisfaction, the impact on your staff and clients, and the different options that are out there. First, he recommends not falling into the trap of too much analysis which is a common occurrence given the plethora of options for successful advisors. In order to avoid this, he recommends thinking about what is currently missing from your practice that you want to add, what you want to keep, and what responsibilities you don’t want to add. 

The next step is to think about what type of business model is ideal whether it’s a hybrid model, an RIA, a smaller, more regional focused firm, an independent broker dealer, or a traditional wirehouse. 

Finally, he concludes by saying that hiring a consultant who is experienced and fully knowledgeable about the space can help you make the best decision in terms of financial rewards and personal satisfaction. 


Finsum: Recruitment of financial advisors is picking up pace. Here are some things for advisors who are considering a move to think about. 

 

Published in Wealth Management

In an article for AdvisorHub, Steven Brod of Crystal Capital Partners discussed how alternative investing options are increasingly important when it comes to financial advisor recruiting. He believes that having a robust alternative investing platform is essential for small and mid-size wealth management firms to successfully recruit advisors. 

Alternative investments have exploded in popularity following the poor performance of stocks and bonds in 2022. These investments typically provide increased diversification and the potential for higher returns. 

An effective alt platform will give advisors access to all sorts of strategies and the requisite technology to manage these investments. Interest in alternative investing is especially high among the younger demographic so not having a sufficient platform could repel advisors with such clients. 

Some examples of offerings include hedge funds, private equity, private credit, SPVs, and venture capital. Overall, the platform should offer a broad variety of investing strategies and tools to evaluate these options from a quantitative and qualitative perspective. The final step is to ensure that there is an alignment of interest between the platform, advisor, and clients. 


Finsum: Alternative investing is exploding especially among younger, entrepreneurial advisors. Here is what to look for in a good alt investing platform.

Published in Wealth Management
Thursday, 11 May 2023 14:30

Active Fixed Income Funds Outperforming

In an article for VettaFi’s Modern Alpha channel, Nick Peters-Golden discussed the outperformance of active fixed income funds in the first quarter of 2023. The entire sector has had strong performance since the end of last year primarily due to decelerating inflation, rising recession odds, and the banking crisis. 

As a result, fixed income ETFs saw $52 billion of inflows in the first quarter which is more than 60% of the total $80 billion in ETF inflows. Within the fixed income ETF universe, active bond funds have outperformed as they have been able to take advantage of market volatility and concentrate on shorter-term maturities which have outperformed. 

One example is the Kingsbarn Tactical Bond ETF which invests across the credit and duration spectrum in global bond ETFs and Treasuries. This is an outperformer among active bond funds with a 6.2% return YTD. Another outperformer is the First Trust TCW Securitized Plus ETF which invests primarily in mortgage-backed securities that are comprised of private securities and government-sponsored debt. This fund is up 5.2% YTD. 


Finsum: Active fixed income funds have outperformed in 2023 and been the recipient of the bulk of ETF inflows.

Published in Wealth Management
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