Displaying items by tag: advisors

Model portfolios? They’re making their presence felt.

Their use by advisors is one of the most significant factors now reshaping the financial product distribution terrain, according to broadridge.com.

Gaining a firm handle not only how – but why – advisors are leveraging the model portfolios yields insight into the idyllic sales approach required to lasso model driven fund and ETF assets. What’s more, its effect on the distribution strategies and subsequent profitability generated by asset managers talks with a big stick.

Within the $6.5 trillion investment advisory solutions industry, these types of models perpetually have played a key role, according to MMI.

Working from scratch, advisors can build each client portfolio in their book of business.  Not only that, using a more standardized approach, advisors, by tapping into broker/deal programs like rep-as-portfolio, can take their own models and run with them.

It doesn’t stop there. Advisors -- particularly IBDs and RIAs – have the leeway to hang onto discretion and executive models through emerging model marketplaces. 

The reason for their popularity are apparent, according to troweprice.com. Not only can they abet your ability to streamline your business, you also can pare risk. Another key attribute: they avail you the opportunity to devote more time to clients.

However, performance can vary wildly depending on the model, which can make discovering the idea fit you’re your client less than easy pickings.  

While direct index may be a hot industry topic, not all advisors are buying in. In fact, most clients don’t even know what direct indexing is. Based on comments from a panel of advisors and tech executives at the WealthManagement.com Industry Awards earlier this month, clients aren’t asking for direct indexing and most have never heard of the term. While financial giants such as Goldman Sachs, Fidelity, Vanguard, Pershing, Schwab, and Franklin Templeton are acquiring firms and building out direct index offerings, the strategy has not made its way into client and advisor discussions. Megan Meade, CEO of The Pacific Financial Group told WealthManagement.com, “They’re just not that sophisticated of investors. They don’t have the assets for that. Nor do they need that level of tax efficiency.” Adding to the uncertainty are tech executives who are also unsure about the current value of direct indexing. J. Helen Yang, founder and CEO of Andes Wealth Technologies told the publication, “I am very skeptical about direct indexing as a way to offer personalization.”

Finsum: A recent panel of advisors and tech executives revealed that many haven’t bought into direct indexing yet, while most clients don’t even know what it is.

Advisors, it seems, are the belles of the ball. Stepping up to their full potential, they’re drawing sweet landing spots along with equally tantalizing deals to sign on the bottom line, according to forbes.com.

But the primary force juicing the movement of advisors is, well, the advisors as they yearn for more freedom and control of how they do business with clients.

Earlier this month, the fourth annual CNBC Financial Advisor 100 was announced by the network, according to cnbc.com. Top advisory firms – which provides clients with a big boost addressing their financial welfare – are recognized by the ranked list.

Some investors have a plan to help deal with these turbulent times when the need for financial guidance is paramount; others don’t and are compelled to closely evaluate their finances and take the reins in order to withstand a topsy turvy environment. Taking on a financial advisor is a way of doing that.

The top 10 2022 CNBC FA 100:

1.         Woodley Farra Manion
2.         Dana Investment Advisors
3.         Albion Financial Group
4.         Heritage Investment Group
5.         Edgemoor Investment Advisors
6.         Salem Investment Counselors

7.         Leavell Investment Management
8.         Halbert Hargrove Global Advisors
9.         The Burney Company
10.       Lee, Danner & Bass

Guardian Life Insurance recently announced that Talcott Resolution Life Insurance Company will reinsure about $7.4 billion in variable annuity benefits. Most of the contracts have guaranteed living withdrawal benefits and death benefit riders. The deal is expected to close by the end of the year. While Guardian will still be responsible for meeting contract obligations, advisors may have to explain to their clients why a lesser-known company is backing the guarantees. Guardian stated that it pursued this deal to focus its capital on exploring additional opportunities. Talcott only started after the Great Recession, when Hartford Financial Services wanted to separate from its large annuity business. The firm was aquired by Sixth Street last year. This deal is especially noteworthy as pressure from low returns has been pushing companies to find ways to distance themselves from some types of annuity businesses.

Finsum: To focus its capital on additional opportunities, Guardian Life picked Talcott Resolution Life to reinsure $7.4 Billion in variable annuities.

Kestra Investment Management recently announced the launch of its first two model portfolios series. The portfolios, which are exclusively designed for financial professionals associated with Kestra, are structured to maximize opportunities for clients, by providing options based on a client’s risk preference, desire for growth, and tax sensitivity. Both portfolio series have tax-aware versions, are low-cost, and flexible to fit a wide range of client needs. The Strategic Series has a long-term focus with multiple risk profiles. It is designed to be an efficient, streamlined solution with low turnover while still maintaining exposure to potential economic growth. The Dynamic Series is more active and has a higher level of trading activity for investors looking to benefit from changes in economic and market trends. The Kestra Investment Management team will manage the model portfolios. The team will analyze potential investments, use a rigorous due diligence process to select the best-suited funds, monitor portfolio allocations to opportunistically make changes, and regularly rebalance those allocations to keep each portfolio model aligned with its goals.

Finsum: Kestra launched two model portfolio series, one with low turnover and another with a higher level of trading.