This year's model: Genworth inches closer to UMA set-up

New platform features nonproprietary products only; still lacks customized SMAs

Jan 31, 2013 @ 1:57 pm

By Jeff Benjamin

Genworth Financial Wealth Management has taken another step toward the unified-management-account model with a new platform offering comprehensive portfolios made up of nonproprietary products.

The new GPS Select Solutions platform, details of which were announced Thursday, builds on a less comprehensive platform including proprietary funds that Genworth rolled out in May 2011. UMA models, which are slowly gaining traction with financial advisers, are very popular at wirehouses.

The original GPS Solutions model, which now holds $1.6 billion in assets, will continue to exist as “a more simple and turnkey solution for advisers,” according to Mike Abelson, senior vice president of investment and product management.

A number of distinctions exist between the original and Select platforms. Those differences start with the expanded range of products on the newer version, including using only nonproprietary mutual funds and exchange-traded funds.

Investment minimums on the Select platform are set at between $100,000 and $250,000, compared to $25,000 for the original version.

One area where the new platform remains distinct from wirehouse UMA models is that Genworth is not yet including customized separately managed accounts as part of the platform.

Fees on the new platform start at 55 basis points, with fee break points starting at $500,000.

Mr. Abelson said the Select platform will enable advisers to allocate client assets into comprehensive multiasset and multimanager model portfolios that include a range of themes and subthemes including accumulation, distribution, preservation, tactical, absolute return, and multiasset income.

The typical model portfolio, which is designed to be used as a core portfolio holding, will include between 40 and 60 underlying funds. By contrast, the models in the original platform hold about a half dozen funds. “We've taken the original model and added flexibility, more customization and underlying transparency,” Mr. Abelson said.

He added that the launch of the Select version does not mean the end of the original GPS platform, which he dubbed a success.

“It is still an important and viable product,” Mr. Abelson said. “It will live on, on our platform.”

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