Model Portfolio & SMA Strategists Showcase - Flipbook - Page 48
SMAs & MODEL PORTFOLIOS
that internal capability toward the work
that managed-account delivery actually
still requires from the practice: running
the four-leg due-diligence process (p.
22) on prospective providers, monitoring
existing provider relationships on an
ongoing basis rather than a one-time
basis, auditing the fee-stack math
discussed earlier across the practice’s
provider roster, and supporting the
client-communication work discussed
earlier (p. 42) with the kind of
preparation and follow-through that a
good relationship deserves.
An analyst who used to screen funds
is often well-suited to become the
practice’s internal due-diligence
specialist. The skill set (research
discipline, comparative analysis,
healthy skepticism about performance
claims) transfers directly, even though
the object of the research shifts from
individual securities to model providers
and SMA strategists.
THE IDENTITY SHIFT,
PRACTICE-WIDE
An earlier chapter covers how to
reposition an advisor’s value to a single
client, one conversation at a time (p.
42). A practice migrating its entire model
faces a related but distinct version of
this problem at scale. The practice’s
own public identity, its website, its
marketing materials, the language
its advisors have used for years to
describe what makes them good
at their jobs, was very possibly built
around fund-picking skill and stockselection acumen, and that language
needs to change before, not after, a
prospective client encounters it.
This matters more in a multi-advisor
practice than a solo one, because it’s
genuinely possible for some advisors
within a practice to embrace the new
model enthusiastically while others
quietly continue picking funds the old
way, creating an inconsistent client
experience and an internal culture
question that no amount of client-level
planning resolves. A practice-wide
migration deserves an explicit internal
conversation about what the firm’s
identity actually is now.
Not “we used to pick stocks, now we
don’t,” but the more durable version
of the argument this entire guide has
made: the practice’s value was always
its judgment about risk, structure,
and each client’s actual situation, and
outsourcing the mechanical portfolioconstruction work is what finally lets
that judgment become the visible,
marketable core of what the practice
does.
BY THE NUMBERS
A realistic timeline
Twelve to eighteen months for a typical
established practice, not a single
quarter. Roughly two to three months
of foundational work before any client
conversation happens, two to three
months piloting with a small, lowcomplexity client segment, six to nine
months scaling to the rest of the book
following the sequencing logic discussed
earlier, and an ongoing institutionalization
phase that never really ends, since it
becomes the practice’s new default rather
than a project with a close-out date.
A PHASED ROADMAP
Trying to do all of the above
simultaneously is how a well-intentioned
migration turns into a chaotic one. A
phased approach, run over roughly 12
to 18 months for a typical established
practice, tends to hold up better than
an attempt to convert everything within
a single quarter.
during the pilot. The fourth and final
phase is institutionalization, making
the new workflow the practice’s actual
default for every new client from that
point forward, rather than a project that
concludes and reverts. This is the same
point made earlier about individual client
relationships (p. 46), applied here to the
practice as a whole.
The first phase is foundational and
involves no client conversations at all.
It includes selecting the provider and
platform relationships the practice will
actually use, modeling the revenueconversion curve described above,
building the compliance re-papering
templates and process, and having the
internal staffing conversation before
a single client is approached. The
second phase is a deliberately small
pilot, migrating a handful of clients,
ideally from the lower-complexity end
of the segmentation discussed earlier,
to stress-test the actual paperwork and
workflow before scaling it.
A PRACTICE-MIGRATION
CHECKLIST
The following belongs in the same
reference category as Appendix A’s
due-diligence questionnaire: a working
document rather than a narrative to
read once and set aside.
The third phase is the scaled rollout,
applying the full client-sequencing
framework discussed earlier to the
remaining book of business, with the
operational kinks already worked out
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Foundational phase: Provider and
platform relationships selected and
contracted. Revenue-conversion
timeline modeled month by month,
not just before-and-after. Compliance
re-papering templates built, including
advisory agreements, registrationchange paperwork, and disclosure
documents. Internal staffing
conversation held, with specific
redeployment plans for affected roles.
Practice-wide messaging and marketing
materials drafted, reflecting the
repositioned identity discussed earlier,
applied at the practice level.
