A Succession Planning How To – One Advisor’s Journey

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Despite high profile media attention given to the lack of advisor succession planning, there still remains a large gap in the preparedness of advisors, which is leading to challenges for the long-term health and sustainability of the industry. Read more ›

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Posted in Advisors, Asset Managers, Wealth Management, Wealth Management and Financial Planning

Recap: Seen and Heard at the 2016 FPA BE Conference

img_1291Held over 3 days last week at the Baltimore Convention Center the 2016 FPA “BE” conference gathered over 2,000 advisors, industry experts, consultants, and top technology providers for educational sessions, networking opportunities and the chance to see the latest in all aspects of financial planning.

One example of that financial planning technology focus was the introduction by the FPA of a new focus on risk alignment.  Partnering with True Profile, a risk profiling and goal analysis consulting platform, True Profile and the FPA are creating a mathematically based methodology to help advisors and their clients better understand risk. Using game theory and interactive mobile technology applications, True Profile and the FPA are developing a new way to get at the thorny issues of how much risk clients can truly handle and the best ways to prioritize goals. Read more ›

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Posted in Advisors, Asset Managers, Black Diamond Performance Reporting, Technology, Wealth Management and Financial Planning

SS&C Advent: Delivering Today, Investing for Tomorrow

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What will the asset and wealth management industries look like in five, 10 or 20 years? How will firms stay competitive and current as the industry changes and technology advances?

At Tuesday’s opening session of SS&C Deliver in San Diego, SS&C Advent Co-General Managers Dave Welling and Robert Roley posed these questions to underscore one of their key messages: SS&C Advent must be sure that it is delivering what clients need today while anticipating what they will need in the future. Firms cannot be so focused on today that they risk being “lapped” by advancing technology and changing market dynamics.

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Posted in Advent News

The Shift to UMAs from SMAs & the Impact on Managers

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The back story
As large program sponsors in the advisory space, such as Merrill Lynch, Morgan Stanley, Wells Fargo, and UBS, are making more and more progress toward platform consolidation and moving away from disparate legacy systems, trends have shown that they are beginning to favor the Unified Managed Accounts (UMA) structure over the Separately Managed Account (SMA) structure.

As evidence, Cerulli reported Q2 2015 assets in UMA programs to be approximately $437 billion and assets in SMA programs to be around $871 billion. However, over the next few years, Cerulli expects much of those SMA assets will move to UMA assets, making the latter close to 25% of the total estimated $4.2 trillion in the advisory space.

What’s driving this trend?
Under the UMA structure, sponsors and clients can typically have access to a manager’s models at a lower cost. Additionally, it’s more cost effective for their end clients to have a single (aka unified) custodian account so they are able to limit the operational overhead of managing multiple separate custodian accounts as they usually have to do with a SMA architecture.

Along with other large sponsors, wirehouses have declared their efforts to merge disparate legacy systems into more unified platforms, which will also fuel growth of UMAs. In fact, 71% of sponsor firms surveyed by the Money Management Institute indicated that UMAs and single integrated platforms represented the best opportunities for advisory program growth, a 30% jump from 2 years ago.

What’s the effect on Managed Account managers?
While the UMA structure is seen as more effective for sponsors and clients, it can be less advantageous for investment managers. In an effort to gain a more in-depth understanding of the effects of the shift from SMA to UMA structures, we conducted a survey across our client base, specifically Managed Account managers. Check out a few of our key findings:
• Managers are specifically looking for change in market value over time and Net Flow information over time primarily at the Model, Financial Advisor, and Branch level.
• Approximately 75% of managers indicated that they receive information from sponsors about once per month in a data-readable format, though some firms receive information which needs to be manually converted.
• Additionally, almost 75% of respondents indicated that they need to manually download the information received from their sponsors.
• Over 50% of respondents will spend more than 6 hours every quarter just aggregating information, with over 25% spending over 15 hours.

The fees that UMA managers collect, as well as the operational responsibility of the manager, tend to be less than under an SMA model. With that said, the managers also have less transparency into assets and revenue information received from the sponsors. They rely on this information to track and maintain a holistic view into asset flow and profitability for business intelligence analysis as well provide insight to front office sales teams to potentially help target business development efforts. Not to mention, with less transparency, managers are unable to easily reconcile fees they are owed by the sponsors. Additionally, under a UMA structure, the industry currently has no mechanisms in place for aggregating data. The inefficiency in gathering and converting data from disparate systems and various formats leads to not only having to allocate hours, but also human error.

How we can help
SS&C Advent has a long history of working with custodians and institutions within the Managed Account industry via our Advent Data Solutions. We help aggregate data more efficiently, eliminate the need for manual labor, and increase transparency. Not only do we recognize this industry trend as an opportunity for the expansion of our already robust custodial data network to help address the move to UMA structures, but also potentially provide our existing and future Advent Outsourcing Services clients with additional aggregation services options as well.

We’d love to hear your feedback and provide you with more information on as the SMA to UMA trend picks up speed. Feel free to reach out to me at bbykhovs@advent.com or learn more about Advent Outsourcing Services here.

Boris Bykhovsky, a Director within the SS&C Advent Solutions Consulting group, has been with the company for 10 years. He is responsible for advising current and prospective investment management clients on SS&C Advent solutions starting from the initial identification of business needs and through to the end of the evaluation process.

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Posted in Asset Managers

Integration Update: RiXtrema + Black Diamond Now Available


SS&C Advent’s Black Diamond wealth platform is now integrated with Portfolio Crash Testing by RiXtrema, one of the advisory industry’s leading Portfolio Analytics/Risk Management solutions.

Portfolio Crash Testing is a risk management software solution based on mathematical methodology created by an award-winning research team that helps financial advisors identify and discuss risk with clients. Read more ›

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Posted in Advent News, Advisors, Black Diamond Performance Reporting, Risk


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