Model Portfolio & SMA Strategists Showcase - Flipbook - Page 66
SMAs & MODEL PORTFOLIOS
Is the firm GIPS® compliant? If not,
describe the performance reporting
methodology used instead.
Appendix A: Due-Diligence
RFP Questionnaire
A working document for evaluating
a model portfolio provider, SMA
strategist, or TAMP, organized around
the four-leg framework built out earlier
in this guide (p. 22).
FIRM & TEAM
How long has the current lead
portfolio manager(s) been running this
specific strategy?
Has there been portfolio manager or
analyst turnover on this strategy in
the past three years? If so, describe
any resulting changes to process or
performance.
How many strategies does this team
manage in total, and how is the team
resourced relative to that number?
If the named lead decision-maker
were unavailable tomorrow,
permanently, what happens to this
strategy? Is there a documented
succession plan or a genuine secondin-command with independent
decision authority?
OWNERSHIP & PARENT
What is the firm’s ownership structure?
Employee-owned, bank/trust-affiliated,
research-firm-affiliated, or other?
If employee-owned, what does
succession look like as founding
principals near retirement?
If bank- or trust-affiliated, is the firm
incentivized or required to steer
clients toward the parent institution’s
proprietary products, custody, or
lending as a condition of access?
If affiliated with a research firm or
other data provider, how concentrated
is ownership across the research
arm and the advisory arm, and does
compensation for portfolio managers
depend on performance or firm
ownership?
INVESTMENT PROCESS
Describe the security or fund selection
methodology in specific terms.
What is the rebalancing schedule,
fixed calendar or manager discretion?
How is a rebalance communicated to
advisors/platforms?
What is the sell discipline? Under
what specific conditions is a holding
removed outside of a scheduled
rebalance?
Is this a core, factor-based, tactical,
or hybrid strategy? If tactical or factorbased, what specifically triggers a
shift, and what is the evidence behind
the factor or signal being used?
Has the strategy stated an assetcapacity limit, and how much room
remains against that limit? (Particularly
relevant for concentrated, highconviction strategies where continued
asset growth can itself become a
performance headwind.)
PERFORMANCE & RISK
Is reported performance a live
composite of actual client accounts,
a theoretical/model account, or
something else? Describe the
methodology.
Provide trailing one-, three-, and
five-year returns alongside standard
deviation, Sharpe ratio, maximum
drawdown, and tracking error versus
the stated benchmark.
What is the benchmark, and why is
it the appropriate comparison for this
strategy’s actual risk profile?
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Does the strategy carry a third-party
rating (for example, Morningstar
Medalist)? What is the current rating
and basis?
TAX MANAGEMENT
What is the strategy’s average annual
turnover?
What is the average number of
individual positions held?
Does the strategy offer active tax-loss
harvesting? Describe the process and
frequency.
Is direct indexing or personalization
(sector/security exclusions) available
within this strategy?
For fixed-income strategies, what is
the firm’s institutional trading access
and execution quality in over-thecounter municipal or corporate bond
markets, and is credit research
conducted independently or sourced
solely from rating agencies?
STRUCTURE & DELIVERY
Is this strategy available as a modelonly delivery, stand-alone SMA, UMA
sleeve, or bespoke discretionary
management? Which platforms/
TAMPs currently offer it?
What is the account minimum, and
under what circumstances (if any) is it
waived?
If offered through model-only delivery,
what notification process exists for
rebalance signals, and what is the
advisor’s/platform’s responsibility for
execution?
FEES
What is the strategy’s stated
management fee?
