Advisors

Digital disruption in wealth management is rapidly coming of age. We assist you to sift through carefully generated choices to create timely, specific, and actionable recommendations. We, working with and for you, transform how your clients allocate to and implement actively managed portfolios.

Personalized service is going to be a key weapon in advisors’ battle against irrelevance and disintermediation. Once investors realize that a managed account can be manufactured in minutes for a fraction of traditional fees, advisor fee compression is inevitable. In an era when money can be managed effectively, efficiently and cheaply, ActiveAllocator helps advisors move up the value curve. Marrying our cutting edge, fact based algorithm-driven predictive analytics, with your own special understanding of your client’s unique circumstances, drives superior outcomes. We believe that this powerful combination goes far beyond anything offered by emerging digital financial advice platforms, robo advice and digital investment managers.

In an age of technology driven mass customization, individual customers expect highly personalized offerings that are uniquely tailored to their own specifications. We allow the “traditional” advisor to provide a modern digital advice experience. We help you analyze and arrive at personalized recommendations for each of your clients. We recognize that the “market of one” is the new norm. We do not lump people into broad amorphous meaningless categories such as the wide spectrum of “very conservative” to “very aggressive”. Our portal is designed to drive the individualization of every aspect of asset allocation down to the level of a single client.

Strengthen your bond with your client. We hope you recognize, as do we, that many of the new generation of self-directed investors are less comfortable handing off investment decisions solely to their advisors. Today’s clients know more and want to actively participate in managing their investments as well as the asset allocation process collaboratively with you. ActiveAllocator strengthens your relationship by enabling your clients to become more hands-on, should they choose to do so, and aided by your expert guidance. It makes remote interactions much more akin to face-to-face exchanges. It helps you reduce confusion, allay insecurity, and demonstrate value by drawing your recommendations to empirical data, facts and numbers. Our portal is a valuable tool for you to grow your business and, unlike robo advisors, not a disintermediation threat, for it marries the digital with the very special person-to-person relationship that only you bring to your client.

ActiveAllocator is a strategic business enabler, creating time better spent tending to clients or cultivating new ones. We help you reduce the time you spend managing individual portfolios, while also improving expected portfolio performance.

Eliminate TAMPs, SMAs and “model portfolio” managers to reduce operating costs and /or asset management fees. It has long been recognized that most of the variance in investment returns come from long term asset class strategic asset allocation decisions. This simple, boring, yet extremely powerful insight is unfortunately often glossed over in obsessive search for “best products” or the next hot investment theme. The asset allocation module within our portal optimizes on what your client already owns. It analyzes your client’s aggregate portfolio, does a risk-return based analysis, generates numbers and metrics and makes recommendations to reallocate asset classes to improve the portfolio. In other cases, it suggests the addition of other asset classes such as alternative investments to complement and enhance existing holdings. As you begin using our portal, we urge you to contrast this to prevalent simplistic asset allocation approaches. We believe that prevalent popular approaches often built off simply analyzing historical data, using mean variance optimization, extrapolating with clever optics create false precision and provide false comfort.

Reduce long term litigation losses and insurance costs. Assets are expected to shift to lower cost index-based mutual funds and exchange-traded funds. It is also expected that non-fiduciaries will shift away from providing advice to retirement plans and accounts and many broker-dealers will shift from suitability to fiduciary. This is coupled with a greater awareness of commissions, a focus on reducing costs and expenses in retirement plans, the trend away from the commission based model of retirement advice to more transparent fee-based models. ActiveAllocator helps you fulfill your fiduciary responsibilities better. We recognize, as you undoubtedly do too yourself, that any long term strategic asset allocation recommendation is made at a snapshot in time. In the real world, your client’s circumstances evolve and change continually; periodic rebalancing that comes at a price, may or may not be an option. While many are anchored in a long-term view, most investors would benefit from refreshing a dated investment allocation model, revisit past allocations as well as act on changes in markets and quickly include future capital market assumptions.

More efficient and effective asset allocation and portfolio construction creates more time for, and value to, growing AUA. You know your customers, their history and their financial goals best. ActiveAllocator’s technology enabled framework helps efficiently tailor every interaction to your customer’s unique wants, needs and preferences. Our portal is purpose built to increase the frequency of interactions that your clients have with you - through real time collaboration, generating and discussing what if scenarios on the fly in your meetings, changing pre-existing assumptions on an asset class’s future expected risk and return and modeling it as you converse. You benefit along with your clients, for such collaboration raises the quality of discourse, drives additional meaningful interaction and creates a positive effect on your relationship.

Go beyond selling financial products and make personalized advice your digital priority. When you control the investment process, you own the advice you provide and differentiate your services. We shift financial advisors from being purveyors of investment products to creating desired outcomes for their clients. ActiveAllocator, in minutes, helps you in establishing detailed, standardized assessments of your client’s existing holdings. You will be able to quickly incorporate your client’s preferences to develop long term portfolio objectives. Our portal allows you to combine your judgment with quantitative asset allocation, incorporate constraint conditions and develop appropriate risk management controls. All investment processes are well defined, replicable and completely transparent to you and your client. ActiveAllocator helps you analyze portfolios to generate better choices and have informed conversations.

Leverage our cutting-edge algorithms to create exposures to private equity, private real estate, hedge funds, private debt and managed futures. ActiveAllocator is built to account for the special issues that arise when it comes to alternative assets - for simply extending Modern Portfolio Theory here does not work. ActiveAllocator facilitates constructive client discussions around specific, quantifiable benefits of alternative asset classes. Our portal brings in best practices utilized by the most sophisticated institutional investors to the affluent Main Street investor. ActiveAllocator uses multi-variable stochastic alternative asset models. For instance, allocations may be optimized to have the highest return per unit of specified risk. Constraint considerations may include investor preferences, reducing volatility, left skew, excess kurtosis, maximum drawdown, whilst reducing corner solutions.

We account for, amongst other things:

  • Stale pricing -> serial correlation -> understates volatility.

  • Reporting bias -> overstates index.

  • Volatility not a risk proxy.

  • Time variant illiquidity premium.

  • Inefficient markets.

  • Style drift, asymmetric information.

  • Skills versus market beta exposure.

ActiveAllocator is built on a back-end engine of advanced analytics technologies that add speed, scale, visualization and predictive capabilities to investment decision modeling. By embedding analytics capabilities to financial advisor use in real-time and in the context of a business process, the traditional system of record of “client portfolio holdings” now becomes a system of actionable new investment insight. These insights are gleaned from predictive analytics which drives nearly all aspects of our recommendations. Only ActiveAllocator integrates passive and active, liquid and illiquid, traditional and alternative investments for comprehensive, objective portfolio optimization.