Trust a Goliath Envestnet. But do Verify with a David,


A Goliath since 2001 claims to  empower wealth management. How?  By claiming that more than 59,000 financial advisors use their systems to manage $1.3 Trillion in client assets. By advertising that thousands of investment vehicles and hundreds of managers and strategists, and millions of investor accounts with over 27% of independent advisors and over 30% of large RIAs ‘trust’ them. By subtly suggesting that Goliath is positioned to benefit from the transformation of wealth management – growth in fee-based assets, support for fiduciary process, integrating platforms replacing legacy platforms and going as far as to say it increases efficiency and drives better outcomes… Helpful pay for play research adds further ‘credence’ by providing supportive numbers for  “more clients served”, ” larger book of business”, “higher practice revenue/production”, ” more clients served”, ” doubled their book of business”, “more time for client management” et al.




ActiveAllocator aims to reshape the wealth management industry by resetting advisor and investor expectations about investment management and asset allocation advice, including where the best advice comes from, what it should cost, and how it is delivered. We are driven by an authentic mission: to increase expected returns for 33 million investors by eliminating the 20%-30% loss that’s built into the way the retail financial advice and investment management industry is currently structured. Our technology can remove the deadweight costs of $130 billion in strategic asset allocation inefficiency and drastically reducing the $260-$300 billion being paid in advisory fees , one individual portfolio at a time.

Goliath can’t and wont do that – for this is his Achilles heel.

We estimate that retail investors lose more than $400 billion annually in advisor fees and portfolio inefficiencies. This value destruction is both explicit in typical 1% or higher advisory fees charged and implicit in 0.5% or more asset allocation inefficiency.  Moreover, these costs are in addition to other contracting frictions, product commissions and costs. To increase efficiency and serve a broader audience, advisors put investors in “model portfolios,” which commoditize and marginalize advisor service and expertise. Model portfolios also fail to adequately account for personal investment views, preferences and limitations. Worse still, clients rarely know how inefficient their allocations really are and have no objective means to measure and value advisor performance.

ActiveAllocator helps individual investors, financial advisors, and asset managers analyze existing allocations, discover inefficiencies, and create optimized bespoke portfolios – in 10 minutes, in 10 clicks and at 10 percent of the typical cost. ActiveAllocator allows users to (i) aggregate investment accounts and holdings across 15,000 financial institutions; (ii) search, recognize and automatically map over 4 million financial products and securities to granular 50 asset sub-classes; (iii) compare and validate their own market views with capital market assumptions from 10 Wall Street firms; (iv) personalize investing preferences across 10 dimensions; (v) optimize and construct bespoke portfolios; and, (vi) seamlessly execute rebalancing trade orders across a choice of brokerages.

ActiveAllocator addresses shortcomings endemic to asset allocation tools and services. Our open architecture encourages exploration and expression of advisor views, as well as express investor-specific preferences and constraints. Finally, ActiveAllocator allows advisors not only to deliver real value to clients, but to own the advice they provide and to quantify the direct benefits of their services.

In the battle between Goliath and David the outcome is pretty clear. Big is not better.

Author: Sameer_Jain

Partner. Sameer Jain is founder of FinTech, the world’s first portal that seamlessly integrates traditional, illiquid and alternative investments within portfolios. Prior to this he was Chief Economist & Managing Director at AR Capital. Before that he headed Investment Content & Strategy at UBS Alternative Investments. At UBS, he served as a non-voting member of the Wealth Management Research investment committee, and as a capital allocator was responsible for all illiquid investing including fund manager selection and due diligence across the platform. Prior to UBS he headed product development & investment research at Citigroup Alternative Investments that managed over $75 billion of alternative investments across hedge funds, managed futures, private equity, credit structures, infrastructure and real estate. Here he led a team that developed proprietary models for portfolio strategy and asset allocation with alternative investments, provided investment support and research to pension plans, sovereign wealth funds, endowments as well as internal clients including Citi Private Bank. Before this he was with Cambridge Alternative Investments and SunGard (System Access) where he travelled to over 80 countries for work across Europe, Asia, Middle-East and Africa. He has written over 30 academic and practitioner articles on alternative investments with thousands of downloads at SSRN, presented at over a hundred industry conferences and has coauthored a book, Active Equity Management. Mr. Jain has multiple degrees in engineering, management, public administration and policy and is a graduate of Massachusetts Institute of Technology and Harvard University. He is a recipient of the Alfred Sloan Fellowship and subsequently was a Fellow of Public Policy and Management at the Harvard Kennedy School of Government for a year. He holds Series 7 and 66 securities licenses.

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