Research Affiliates targets advisers

Company is rolling out new research papers and tools aimed at helping the advice industry

Jun 8, 2018 @ 10:46 am

By John Waggoner

Research Affiliates, which produces investment research and asset allocation advice for institutional investors, is looking at a new market: advisers.

The company's academic and quantitative work is used to manage $201 billion in assets worldwide, with major clients such as Pimco, PowerShares and Charles Schwab & Co.

As financial advisers increasingly outsource portfolio management, however, Research Affiliates has started to gear its research — in somewhat less wonky form — toward advisers. It also has ventured further into behavioral finance.

"We're trying to get transformative insight and products for investors and advisers," said John West, managing director and head of client strategies at the company.

On its website's adviser section, for example, Research Affiliates has an essay on the most dangerous (and ubiquitous) shortcut in financial planning: using past returns to forecast the future. The paper also introduces the company's online asset allocation tool — which, at the moment, recommends very low levels of U.S. stocks.

What are the messages the company wants to get to advisers and their clients?

• Present a range of outcomes for clients to give perspective. For example, volatility has risen sharply this year — but it has simply risen to normal levels from extremely low levels, Mr. West said.

• Use rebalancing to get clients to invest more in assets that have fallen. "It's a nice way of putting money into what has disappointed you the most," Mr. West said. "Rather than investing more in losers, investors often say, 'I want the losers out of the portfolio.'"

• Learn to manage the thankless task of choosing fund managers.

Research Affiliates offered a symposium for advisers this spring, with Rob Arnott, the company's chairman; Josh Brown, the CEO of Ritholtz Wealth Management; and Ben Johnson of Morningstar. The company will post videos of the symposium later this year, Mr. West said, and is considering making presentations before professional groups, such as the Financial Planning Association.

"We're committed to making an impact in this market," he said. "There are trillions of dollars at the four largest custodians, and trillions more in the largest wirehouses. That will grow as people roll their 401(k) balances to advisers."

0
Comments

What do you think?

View comments

Recommended for you

Featured video

INTV

What's behind the TCA, ETrade deal?

Deputy editor Bob Hordt talks with senior columnist Jeff Benjamin about what each party in the recent acquisition stands to gain by joining forces.

Latest news & opinion

As DOL fiduciary rule dies, variable annuities come alive — sales up for first time since 2014

Indexed annuity sales also broke their previous quarterly sales record.

Cambridge Investment Research bags mid-sized broker-dealer

Broker Dealer Financial Services, an IBD with 150 reps and advisers, and $3.5 billion in assets, will become a Cambridge OSJ.

HighTower on prowl for new CEO, Weissbluth to become chairman

Move is latest in Chicago-based RIA consolidator's effort to expand senior leadership team.

What's in a name? For TCA by ETrade, everything

Trust Company of America is gone, and there's big buzz over the name change. But turning the custodian into an industry powerhouse will take a lot longer — if it happens at all.

When it comes to regulating AI in financial services, murky waters are ahead

Laws are unclear on how the technology fits in with compliance.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print