A recent article in Financial Advisor IQ states that, regardless of the outcome of the DOL rule, broker-dealers are considering their asset management needs with a more discerning eye. The article primarily discusses the value of 3rd party managers who can help with compliance and customization; in our view, a robust managed account platform can tackle these needs regardless of the investment choices.
Ultimately, the ability to service a client’s evolving investment needs comes down to both appropriate design and operational support. An open Unified Managed Account(UMA) platform not only enables advisor choice regarding manager fees and styles, but adds both scale and differentiation in the following ways:
- Profiling process – to match client preferences and maintain documentation
- Consistent implementation – outsourcing of trading/rebalancing duties & liabilities
- Client-level customization – ongoing accomodations for cash needs, legacy holdings, etc.
- Tax management – coordination across managers to identify tax alpha opportunities
- White-labeled communication – performance reports projecting the advisor’s brand
- Seamless investment changes – hire/fire inside the platform, no new signatures needed
While the author does indeed highlight some of the major considerations in using 3rd party managers, the ideal solution set can be achieved through use of technology that enables both the advisor and the chosen managers to leverage their own unique skills in servicing the client.