Dana D’Auria, Co-CIO and Group President of Envestnet Solutions, joined Julie Cooling, Founder and CEO of RIA Channel, to discuss how Envestnet’s technology and partnerships can customize investor portfolios.
Envestnet Solutions includes the turnkey asset management program (TAMP) and Envestnet’s asset management offerings. Envestnet partners with four large asset managers to provide personalized services, high net worth solutions, direct indexing, SMAs, and models.
Looking at Envestnet as a middleware that delivers backend solutions for independent broker-dealers and RIAs, the TAMP offering is the best that Envestnet has assembled. The system includes proposal generation, billing, reporting, and links to over 800 asset managers, models, SMAs, and UMAs.
The evolution from mutual funds to ETFs brings access to market returns at reduced cost. The next step in this evolution is active equity SMAs that offer access to market returns with the added benefits of direct indexing and tax loss harvesting. D’Auria notes that 20% of asset flows are to direct indexing strategies. Direct indexing algorithms can be customized for the needs of individual clients. Client goals can include completion portfolios, sustainability, values-based preferences, or factor tilts such as dividend yield.
D’Auria states that the trend is to bring alternative investments down market, including registered vehicles such as interval funds and tender offer funds available to retail investors. These evergreen structures make alternatives easier for advisors who don’t have to deal with capital calls and the reinvestments of proceeds from maturing funds.
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