Deconstructed: Advisory Platform Makeovers Are In
Financial Advisor IQ
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Welcome to Deconstructed, a weekly newsletter from Financial Advisor IQ that breaks down news and perspectives on portfolio construction.
LPL Financial is revamping several of its advisory platforms.
The firm has been busy adding capabilities and investment strategies to its separately managed account, or SMA, and unified managed account, or UMA, programs, as it aims to attract more high-end advisor teams working with wealthy clients.
Building out an SMA platform that allows the firm to centrally negotiate down fees is "one of the first things they would need to do" to compete in the high-net-worth space, said Pat Newcomb, a relationship manager at Fuse Research.
The firm also combined two of its legacy investment advisory programs: Strategic Asset Management, or SAM, I and II. Previously SAM I and SAM II had different ways of handling transaction fees. In the new, combined program, clients pay the transaction fees, unless advisors have come to a different arrangement.
The leadership team overseeing the firm's advice platforms has also undergone some changes.
Kabir Sethi, who was responsible for LPL's technology and wealth management platforms, is leaving the firm at the end of March as part of a reorganization, regulatory filings show. The firm is not replacing the role, but has reassigned Sethi's responsibilities across different teams, an LPL spokesperson told FA-IQ.
LPL is not the only wealth firm consolidating advice platforms.
Mass Mutual will merge two unified managed account platforms, with the goal of lowering costs and simplifying services, FA-IQ's sister publication FundFire reported. One key difference between the two platforms is the product menu—one program featured alternative investments, while the other did not.
"This consolidation will make it even easier for reps and clients to do business with us while providing additional investment options and flexibility," said Vaughn Bowman, head of wealth management at Mass Mutual, in an emailed statement.
The combined platform will also get a technology upgrade that can accommodate single-sleeve accounts. The new system can crunch various asset classes and investment strategies into a single, simpler investment portfolio.
Meanwhile, Morningstar Wealth has augmented its turnkey asset management platforms with new SMA strategies from six outside managers, FundFire reported last month. Until last April, the platform had been limited to proprietary SMA strategies.
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