Model Portfolio & SMA Strategists Showcase - Flipbook - Page 4
SMAs & MODEL PORTFOLIOS
How to Use This Guide
This guide is built to be read in more than one way,
depending on what brought you to it.
If you’re deciding whether to outsource
at all, start at the beginning and read
straight through the section on structure
choice (p. 12). That stretch covers the
case for outsourcing, the vocabulary
you’ll need, the current market shape,
and the first real decision point:
SMA, UMA, bespoke discretionary
management, or something else entirely.
SCOTT MARTIN
EDITOR-IN-CHIEF
MODEL PORTFOLIO & SMA
STRATEGISTS
Your clients deserve better than a
random walk down Wall Street. More
importantly, that’s what they pay you
to achieve . . . if they wanted lowcost exposure to “the market” as a
whole, they could find their own way
to SPY or QQQ or whatever index fund
catches their eye that day.
That’s why managed accounts
remain the secret weapon of choice
for advisors willing to stretch a little
to give investors a shot at better
outcomes. It’s a different mentality
than simply plugging a few funds
into the portfolio. You need to do a
little work investigating managers
(remember “managers?”) and then
adjusting the asset mix to fit your
clients’ actual situation. That means
getting involved with taxes, values,
multi-generational planning.
For a lot of advisors who think they’re
competing with you, that’s too much
effort. But if you’re reading this,
you’re willing to go the extra mile to
differentiate yourself and reach for
something better than “random.”
If you’ve already decided to outsource
and need to build the operational stack,
the chapters on TAMPs, marketplaces,
and overlay management (p. 14) cover
the infrastructure layer. The six-step
framework near the end of the guide
(p. 45) ties this section back together as
a working checklist.
If you’re evaluating a specific manager
or provider, go straight to the duediligence framework (p. 22), then the
strategy-type context that follows it
(p. 25), then the chapter on reading
performance claims skeptically (p. 29).
Appendix A’s RFP questionnaire turns
all three into a document you can
actually send.
If your practice serves high-networth or tax-sensitive clients, the
chapter on direct indexing and taxmanaged SMAs (p. 31) and coverage
of municipal bond SMAs (p. 27) will
change how you talk to those clients
specifically, including how to move a
client into a new strategy without an
avoidable tax bill along the way.
If you work with retirement plan
sponsors, the chapter on retirement
plans and managed accounts (p. 39)
stands somewhat apart from the rest of
the guide and can be read on its own.
If you want the client-facing payoff, the
chapters on client communication and
building your stack (pp. 42, 44) are
the shortest path to something usable
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this week. Together they cover how to
explain this shift to a client without it
sounding like abdication, and how to
build your own version of the stack this
guide describes. Appendix B collects
ready-to-use scripts for the specific
conversations discussed there in
general terms.
If your practice itself is still built around
fund selection rather than managed
accounts, the section called Migrating
the Practice Itself (p. 46) addresses
the business-model transition directly:
revenue conversion, compliance repapering, staffing, and the practice’s
own public identity. This is a different
problem than migrating any individual
client, and it’s worth reading before
attempting either.
If you want to see the whole framework
applied rather than explained, Case
Studies in Practice (p. 49) walks four
composite client scenarios through the
full decision sequence end to end. It’s
worth reading before your next complex
client meeting, or handing to someone
new to the practice as a working
example of how the pieces fit together.
Sidebars throughout are marked and
can be read independently of the body
text, useful for a quick refresher on a
specific point without rereading the
section around it. The Glossary is built
to be searched, not read start to finish.
The Firm & Strategy Profiles section is
designed as a reference directory rather
than continuous reading. Treat it the way
you’d treat a manager database, not a
chapter.
No part of this guide assumes you’ve
read the parts before it, though the
earlier sections do build the vocabulary
the later ones use without redefining it
each time. If a term stops you cold, it’s
almost certainly in the Glossary.
