July 18, 2023 07:20 AM

Transform and Personalize Your Investment Management Process with a Model Marketplace

Explore how adding a model marketplace to your investment management process can save you time and money, fuel firm growth, and drive personalization and scale.

Advisor Tech

Topics: Client Experience Financial Planning Financial Technology Portfolio Management Practice Management

In the rapidly evolving landscape of investment management, financial advisors are constantly seeking ways to enhance their processes, deliver personalized solutions, and maximize client outcomes.

But personalization takes time. And it’s challenging to focus on scaling your business when you spend hours each week providing attentive, customized service to your existing clients.

Fortunately, technology exists to help you deliver personalization at scale, reducing the hours you spend on behind-the-scenes work for your clients so you can reinvest that time in one-on-one engagement and relationship-building with existing and prospective clients.

One such solution is a model marketplace. Here, we will explore how a model marketplace can transform your investment management process, empowering you to provide tailored investment strategies and elevate your client experience.

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Find Models that Meet Your Clients' Needs and Fit Your Firm’s Business Model

When evaluating investment models, there are two primary stakeholders to consider. First, you need a model that suits your client — one that aligns with their risk tolerance and appetite and doesn’t incur unnecessary or excessive fees.

Then, you must think about what your firm needs. You want to find a model or models that are well-managed, have a compelling backstory and solid underlying strategy, and don’t include steep costs that will erode your firm’s profits.

You also want to seek solutions that allow you to rebalance or change your approach quickly. Some models will incur fees or require significant client paperwork each time you make an adjustment, which translates to client frustration and time wasted on administrative tasks.

A model marketplace provides you with all of the relevant information you need to evaluate a model before you select one so you can find the solution that will serve your clients and save your team time and money.

You can search and filter the models in the marketplace by:

Asset category
Theme type
Risk score
Manager
Subscription fees

Plus, you can read the full manager commentary, model fact sheets, and performance materials before making any final decisions. All of this information helps you find a solution that suits your client’s unique needs and provides you visibility into your firm’s costs.

Take Control of the Investment Management Process

Once you’ve found a model that works for your client and your firm, you can subscribe with one click. From there, how you approach the process is up to you.

If you’ve found a model that’s already well-aligned with your client’s needs, you can assign it to client accounts immediately, as-is.

Or, if you’d prefer, you can take additional steps to customize on behalf of your client, blending the model with other strategies — either from third-party strategists or ones you and your team have developed in-house.

Balance Customization and Scalability

This ability to blend and combine models from the marketplace with those you’ve devised yourself gives you a head-start in the customization process, helping you deliver personalization at scale.

Instead of starting from scratch with each new client, your firm may choose to use an external model as the base for all of your clients.

From there, you can assess each client individually and blend the base model with others (either additional third-party subscriptions or ones you’ve developed yourself). This approach allows you to offer a customized strategy that takes less time to devise.

Maintain Full Control and Discretion Over Trading

Maintaining your own models typically allows you the greatest degree of control, but it is a time-intensive process. On the other hand, traditional third-party models require less time from you, but your clients are subject to adjustments the model manager makes — without your input or consultation.

A model marketplace provides you with the best of both worlds: allowing you access to pre-devised models where you still maintain complete discretion over future trading.

The model marketplace will alert you to any changes the model manager submits, and you can accept or reject the adjustments to the underlying model. When you do make changes in allocations, either as part of a strategist’s proposed shift or when rebalancing internally, you have visibility into all costs and fees.

All of this helps you maximize control over your clients’ investments while reducing the time you need to spend on the process.

Enhance Compliance Within the Investment Management Process

Part of building a customized strategy while delivering on your fiduciary duty is ensuring that a client’s risk level aligns with the current risk level of the portfolio. With a model marketplace that’s been integrated into the rest of your fintech stack, it’s easy to show that you’re in compliance.

The Orion reporting app pulls information on each client’s portfolio composition and risk score to track and record alignment. Streamlining and automating this process helps you to maintain compliance (and proof of it) without the need to spend time making manual updates to your records.

Create a Transparent Client Experience

The final benefit to using a model marketplace that integrates with your full tech stack is the ability to provide a transparent and accessible client experience.

With a client-facing portal and app that provides a breakdown of all portfolio allocations, associated fees, and other important information, your client can see exactly what’s happening with their assets under your management.

And because the model management platform is integrated with the rest of your tech, updates are automatically pushed through to your client-facing portal, saving you time while providing your client with the most up-to-date account information.

The investment management process continues to change, and these shifts have introduced the potential for significant wins for firms willing to rethink their approach. Adding a model marketplace to your firm’s process empowers you to deliver personalized client results with less time and effort.

And the time you save in building, managing, and maintaining a customized strategy for each client can be reallocated toward important growth-focused initiatives that will help take your firm to the next level.

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