Commonwealth Launches Model-Driven Portfolio Management System

Wednesday, August 17, 2011 07:18
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Commonwealth Launches Model-Driven Portfolio Management System

Tags: asset management | profitability

Commonwealth Financial Network has rolled out a new portfolio management platform that lets advisors overlay existing model strategies on their clients' assets, then adjust all accounts at once.

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The firm's new Model Management system automates most of the work of running dozens or hundreds of client accounts at once, Commonwealth says.

 

The basic idea is that advisors can apply outside asset allocation and security selection "models" to their clients' real portfolios, then automatically adjust the portfolios to match changes in the model.

 

Initial models are apparently being provided by Ibbotson and generated in-house.

 

This sounds like the foundation for a true open architecture platform at Commonwealth. If the system lets the firm -- or even individual advisors -- bring in new models from outside money managers, they could offer their clients all the best-of-breed ideas available.

 

It remains to be seen whether the system allows for active tax management, but it will automatically handle sales to meet a retired client's cash needs, for example.

 

Bringing this kind of technology to advisors is fairly revolutionary. Normally these systems are used inside private banks and trust companies.

 

As Darren Tedesco of Commonwealth says, the goal here is to reduce the amount of time advisors spend working with portfolios in order to free them up to get in front of clients and prospects.

 

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