A unified managed account platform that gives advisers greater latitude in customizing portfolios for clients is being introduced today by ADVISORport, the UMA platform service of Wilmington, Del.-based PFPC Worldwide Inc.
The first users of what the company is calling the Next Generation UMA are advisers at SunTrust Investment Services Inc., the brokerage arm of SunTrust Banks Inc. of Atlanta.
Areas of customization include a choice in the initial asset allocation within suitability parameters provided by the sponsor, as well as the blend of vehicles that will make up the client's UMA. As with previous UMAs, these vehicles can include separate accounts, mutual funds and ETFs.
"The adviser may decide to use a manager model as a core portfolio and select an international mutual fund and an emerging-market ETF for added diversification," said Anthony J. Harper, president of ADVISORport.
Once a portfolio is constructed, the platform will allow an adviser to exert tactical control over allocations. Over time, the adviser can also adjust investment selections and eliminate or replace them.
"The first-generation UMA is not truly customized to the client," Mr. Harper said.
Developing the platform took 18 months, he added.
"The greatest challenge has been to layer in the pertinent key systems and allow them to synchronize. ," said Kent Bonniwell, managing director of business solutions for ADVISORport.
Specifically, the interconnected elements include components to handle the initial account proposal process, account maintenance, tax-managed overlay technology, billing, and portfolio accounting and reporting.
"Once you give the adviser the ability to change an asset allocation, you've instantly got a unique model associated with that account," Mr. Bonniwell said. "Add to that the many other customization features, and you've got a massive cascade of possible permutations."
Mr. Harper said that his company will now focus on marketing the platform to other sponsors.
"They are the ones making the decision about implementing this," he said. "To attract and retain the best advisers, they will need offerings like ours. While the new platform is probably most applicable to advisers with high-net-worth clients, others will likely follow in their footsteps."
ADVISORport would not comment on the cost of the new platform.
Currently, PFPC provides managed-account services for about 380,000 accounts, representing $103 billion in assets, supervised by registered investment advisers, broker-dealers and money management firms.
Total assets in UMAs across the industry stood at $39 billion as of June 30
(InvestmentNews, Oct. 29) and are projected to reach $47 billion by the end of this year, according to the Washington-based Money Management Institute.
Davis Janowski can be reached at [email protected].
