Each year, we produce 12 articles throughout the last few weeks of the year, all revolving around one central topic. In the past, we have used this series to discuss various themes ranging from the basics of Point & Figure Relative Strength to trends to know in the coming year. Today, we kick off this year's series, which will revolve around the topic of "Enhancing Your Process With Scalable Customization in 2021".
Each year, we produce 12 articles throughout the last few weeks of the year, all revolving around one central topic. In the past, we have used this series to discuss various topics ranging from the basics of Point & Figure Relative Strength to trends to know in the coming year. This year, all 12 articles will revolve around the topic of "Enhancing Your Process With Scalable Customization in 2021".
Over the last decade, the advisory business has continued to evolve rapidly with the growing trends of lower fees and increased automation. With the influx of low-cost index funds and Robo-advisors offering nearly-free financial planning, investors can now gain beta market exposure at rock-bottom prices without ever setting foot in an advisor's office. The upshot is that it is now more challenging than ever for you as a traditional financial advisor to justify your fee and grow your client base. That said, you must scale your process and sharpen your value proposition as much as possible. To help you do just that, this year's 12 Days of Christmas Series, "Enhancing Your Process With Scalable Customization in 2021," will navigate you through the benefits, use/implementation, and customization of rules-based, Relative Strength-driven guided model portfolios. Additionally, this series will highlight the NDW Model Builder Tool's new features, providing relevant use-cases to help you scale your business in the coming year.
Enhancing Your Process With Scalable Customization in 2021
At last year's November Point & Figure Institute, we had the pleasure of having Brie Williams, Head of Practice Management for State Street Global Advisors, speak to the challenges mentioned above that continue to shape the financial industry's future. These are the same disruptive forces that have made the use of model portfolios one of the most practical solutions for scaling your business and refocusing your most valuable resource - your time. Below is an excerpt of a recently published State Street Practice Management Research Report titled, "Model Portfolio Solutions and the Client Experience":
Today's wealth management landscape presents a unique set of opportunities. Demand for advisory services is expected to grow at a robust pace, thanks in no small part to Baby Boomers transitioning into retirement. Add this to the complexity and number of investment products and services that call for expert guidance. But along with these opportunities, advisors face more challenges than ever before.
The cost and competitive structures of wealth management have changed dramatically since the global financial crisis. Client needs and expectations are evolving, technology is redefining the service model, and regulatory requirements continue to add operational complexity. Wealth managers will need to generate economies of scale to succeed.
A growing number of advisors are embracing portfolio management outsourcing to improve operational efficiency and respond to client needs. They are choosing model portfolio solutions that fit their business development strategy and align with their investment manager philosophy.
With model portfolios, advisors continue to have transparency into investment objectives and portfolio construction. They can choose investment strategies that are best suited to their clients' financial goals. And access to formal governance, documentation, and strategy performance reviews allows these advisors to continue to meet their professional responsibilities.
Generally speaking, the growing popularity in using guided models throughout the advisory world can be boiled down to three key benefits: scalability, process, and time. Those businesses that incorporate model portfolio solutions are generally looking to optimize the investment process for all clients, which opens up the potential for client-base expansion, including those in the next generations who make up the industry's future. Additionally, using an objective, rules-based model methodology such as Point & Figure Relative Strength creates a transparent, logical, and repeatable process that helps remove emotion, "gut feel," and guesswork from the equation. Finally, incorporating model portfolios across your practice can increase overall productivity, freeing-up valuable time to refocus your attention on high-value activities such as managing existing and potential client relationships.
Since 2002, the NDW Research Platform has provided users with rules-based guided models and the supporting tools and research that have all continued to grow and evolve along with the ever-changing industry. Our model offerings date back nearly 19 years, starting with our first guided ETF model created in partnership with iShares. Since then, we've launched over 100+ stock, ETF, and fund score method (FSM) models along with a suite of DALI Tactical Tilt strategies. Additionally, we've expanded our lineup of single CUSIP products that seek to track similar underlying indexes as a select few of our guided ETF models, providing advisors with options when incorporating these strategies into their business.
As mentioned above, this year's 12 Days of Christmas Series, "Enhancing Your Process With Scalable Customization in 2021," will take a deep dive into the Relative Strength-driven methodologies that drive our lineup of stock, ETF, and FSM model portfolios. Additionally, we will review how to build and incorporate custom models into client portfolios using the newly-enhanced NDW Model Builder tool, which allows users to create static, matrix-driven, and FSM-style models tracked on the NDW Research Platform, complete with model alerts and performance tracking functionality.
