New online platform looks to challenge RIA custodians

Motif launches platform for advisers to ease, speed portfolio re-balancing

Feb 3, 2014 @ 9:57 am

By Trevor Hunnicutt

Not every online investment firm is seeking to disrupt the business of financial advisers. Some want to challenge their custodians.

Motif Investing Inc. on Monday announced the launch of a platform that allows advisers to create and re-balance customized model portfolios. The portfolios can be made up of individual securities, including exchange-traded funds or stocks. Advisers can also make use of pre-built allocation schemes available on the website.

The broker-dealer's new Advisor Platform allows advisers to place clients in those portfolios and re-balance them with a few clicks. The platform notifies advisers when portfolios exceed allocated thresholds, and includes social-networking features such as the ability to create a network or investing circle of current and prospective clients.

Motif co-founder and chief executive Hardeep Walia said a number of advisers think traditional re-balancing software is expensive, clunky or takes too much time to use effectively.

“What we're offering advisers is a simple way to do their job,” said Mr. Walia. “A lot of the platforms are not designed for small advisers.”

But Motif could be entering a difficult market. Nearly three quarters of advisers describe themselves as satisfied or very satisfied with their re-balancing platform; more than half say they're happy with their portfolio management and account aggregation services, according to an InvestmentNews survey.

Broker-dealers and custodians provide platforms that help advisers trade to keep client portfolios in line with asset allocation models, as do third-party providers like Envestnet | Tamarac or TRX. And one in five advisers use custom-built platforms. More than half don't use a platform at all for re-balancing.

Founded in 2010, Motif's roots are as an online discount brokerage that offers a low-fee alternative to ETFs. Users can build, share and earn royalties on baskets of securities they create — and trade or re-balance them together for a $9.95 commission. Motif is backed by firms like The Goldman Sachs Group Inc., and its board members include former Securities and Exchange Commission chairman Arthur Levitt Jr. and Sallie L. Krawcheck, the former head of Bank of America Corp.'s Merrill Lynch Global Wealth Management.

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