Which CRM is Right for You? Envestnet|Tamarac’s Advisor CRM

Some of the most popular posts on this blog come from two series of articles: Which Portfolio Rebalancing Software is Right for You? and Which Financial Planning Software is Right For You?

Adding to this trend, I’m launching a new series called, Which CRM Software is Right for You?  In it, I will be reviewing Customer Relationship Management applications designed for financial advisors, including both stand alone packages and those that are integrated with a wealth management platform.

Since I was at the Envestnet 2014 Advisor Summit last week, I thought it would be appropriate to start this series off with a review of their aptly-named Advisor CRM® 2014 application, which is offered as part of the Tamarac Advisor Xi platform.  This new version is targeted at RIA’s and was recently released as a completely redesigned web-based application.

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Is WealthTrace the Right Financial Planning Software for You?

“If we command our wealth, we shall be rich and free; if our wealth commands us, we are poor indeed.”
Edmund Burke

The market for financial planning software has exploded over the past five years with new entrants bringing innovative approaches for managing client’s wealth and planning their retirement.  As part of my series on financial planning software, I reviewed WealthTrace, which is a relatively new player looking to find a niche in between existing products. (See Which Financial Planning Software is Right For You?)

The firm was launched three years ago by CEO Doug Carey, a Chartered Financial Analyst (CFA), former portfolio manager and financial software developer, after he became frustrated by how difficult financial planning software was to use.

They offer two versions of their product; one for advisors and another for individual consumers.   Currently, they have over 300 paid users of the consumer version, with the advisor version supporting around 300 trial users and 50 or so paying clients, Carey reported.

What is your company’s approach to financial planning?

At WealthTrace, one of their goals is to make it as simple as possible for the user to see the results of changes to the plan, Carey responded.  And those results should be front and center on the screen and easy to access.  Also, they believe clients have other goals besides running out of money and their system should help to address these goals, he said. Continue reading

iPad App Review: goalGetter

This is a review of the goalGetter iPad app from ASI Advisor Software.

goalGetter is a personal financial planning app targeted at the end investor.  It is a very simple tool designed to help plan for large financial events.  It’s easy to use with a clean, intuitive layout that allows you to drag and drop to create goals.

The available goals include Retirement, Home & Property, Education, Big Toys (cars, boats, etc.), Life’s Milestones (weddings, babies, etc.), Vacations, Charity and Medical Bills.  You can set an unlimited number of goals, but the interface gets cluttered when you have more than a ten or so.

The app’s single screen consists of a bar graph with dollars on the vertical axis and time on the horizontal. To create a goal, just select an icon from the list at the bottom and drag it onto the graph.  Dragging the icon up down changes the estimate cost and left and right changes the year the goal needs to be funded by.  This function is quite simple to use.

There is an icon of a piggy bank that is stuck on the first year of the graph.  You can drag this icon up and down to change the amount of money you current have in savings.  The bar chart instantly changes to show how much you will have saved going forward (green bars) and whether you will have a funding deficit (red bars) when it comes time to pay for your goals.

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Current Challenges for UMA Sponsors

This post is a summary of a session from the MMI’s 2011 Annual Convention.

The moderator for this session was Lee Chertavian, Chairman & CEO, Placemark Investments. The panelists were Marilee Ferone, Executive Director, UBS Financial Services, Roger Paradiso, President, Chief Investment Officer, Morgan Stanley Smith Barney and Russell W. Tipper, Director, Third Party Discretionary Programs, Managed Solutions Group Merrill Lynch.

According to Dover Research, UMA asset growth was over 100% last year, yet at $123 billion, it makes up only 6% of
total managed account assets. 88% of sponsors report that UMA will receive the greatest amount of funding next year.

There was a lot of debate in the industry regarding overlay management program types between active, hybrid and passive, Lee commented. Back in 2007, sponsors were evenly distributed between the three, but by 2010, the vast majority (80%) had shifted to active overlay, using model portfolios.

There’s been a tremendous change in manager’s attitudes regarding model-based delivery. Among the top 25 model
managers, over 40% weren’t providing models just five years ago.

82% of respondents said that UMH was important, although the technology is still in its infancy.

UBS Strategic Wealth Portfolios

The UBS program is passive-only, with no models and no active overlay, Marilee informed us. It’s nondiscretionary,
except for the sleeve that the money manager controls. It has $6 billion in AUM, with an average account size of $1.3 million.

UBS provides a lot of flexibility for advisors to select investments from an open architecture with over 200 SMA managers to choose from along with 3,100 mutual funds and 300 ETFs. Hedge funds were available when the program started a few years ago, but demand died off due to their limited liquidity. Asset growth in 2010 was nearly 60%, Marilee reported.

Merrill Lynch

Merrill Lynch launched their UMA in 2007, Russ noted. It now has $22 billion in AUM and 42,000 accounts (average account size = $523,000) and is entirely model-based. They allow managers to retain discretion depending on the market that they’re trading in. Merrill sees UMA as a platform for delivering advice and leveraging their investment partners.

They offer a full spectrum and provide flexibility for advisors where they can implement a stand-alone SMA or a model containing mutual funds, equities and ETFs. Merrill’s core offering is focused on SMA, ETFs and funds with 40% of the business in stand-alone SMA and the other 60% in models. In most cases, they leverage the firm models and don’t allow swapping of strategies. Russ stressed that they want their platform to provide advisors choice and flexibility.

Morgan Stanley Smith Barney

We look at UMA as a solution-based platform, Roger stated. It’s open architecture and designed around the way the advisor and client want to engage. The platform offers over 250 SMA products using model-based delivery, over 300 40 Act vehicles, and over 150 ETFs.

Advisors can create custom asset allocation structures and their own models, which they can use as completion strategies. There are also asset allocations driven by the Global Investment Committee, which created eight models for advisors to choose from. In addition, they can select either strategic or tactical allocations.

Roger listed three client engagement models that are available:

  • Client Discretion (traditional)
  • FA Discretion
  • Consulting Group (CG) Discretion

The CG Discretion uses MSSB asset allocation models and handles manager selection ($25K minimums for all mutual
fund/ETF version and $500K for hybrid version where the firm creates a custom investment selection).  The personal level of the program allows advisors to select from options including tax-managed strategies, restrictions, and transitions.

The one constant, no matter what the engagement model, is the Private Portfolio Group acts as the overlay portfolio manager. A key aspect is the proprietary technology that they’ve built over the past 15 years. There are over 250
people on the team with an average experience of 12 years.

What fixed income options do your programs offer? Do you support muni bond laddering?

The UBS program does not support direct purchase of bonds. They provide the ability for FAs to choose a fixed income allocation that is fulfilled using ETFs or mutual funds. FAs have asked for muni bond laddering, Marilee said, but they haven’t built it out yet.

Merrill advisors have access to top industry fixed income talent, according to Russ. On the taxable side, their overlay manager does the full implementation and in the municipal space, they give managers discretion. Their FA’s have asked for muni bond ladders, but there are issues such as determining the proper minimum account size and the amount of alpha that muni managers can bring.

MSSB offers a dual-discretion model, where they oversee everything, but the fixed income managers do their own trading.

What changes did your firm make to your front-end to add financial planning to your UMA platform?

Merrill has a front-end financial planning engine that’s fully integrated into their advisor desktops, Russ pointed out. However, it doesn’t have the ability to go from idea to execution. In other words, it doesn’t connect to the portfolio
construction or UMA implementation process. Their next generation UMA platform will integrate financial planning
into so it will be an end-to-end process.

Roger confirmed that MSSB is in the same boat. They need to make the connection between the financial plan and
implementation. They should follow through with the plan over the client’s lifetime, but it’s extremely challenging.

How have you changed performance reporting to better support UMA?

UBS provides all standard performance reports, including monthly and quarterly that go down to the sleeve level including attribution analysis. Merrill leverages a single platform across their entire business, so clients receive a similar report whether they’re in an FA-directed, client-directed or discretionary account. They’ve made enhancements to the platform to show sleeve level performance and attribution and historical changes over time.