Asset Management Solutions

Document Sample
Asset Management Solutions Powered By Docstoc
					Envestnet Asset Management
A Leader in Wealth Management Solutions
Our Mission

 To provide financial advisors with the resources required to
 build, implement and monitor investment plans that meet
 the unique goals and objectives of their clients, and to deliver
 these solutions using leading, Web-based technology.

       BUILD                IMPLEMENT                   MONITOR
Fiduciary management &     True personalized       Flexible reporting and
        research               portfolios           monitoring solutions
Envestnet Company Snapshot
 E
       Leading provider of unified wealth management solutions

 Over $35 Billion in Assets under Management and Administration
    Over 200,000 Investor Accounts

 Core Capabilities
    Investment Management
    Technology
    Operations and Administration
    Advisory Services

 Broad Range of Investment Solutions
     Separate Accounts (Access to over 150 Asset Managers)
     Mutual Fund Portfolios
     Alternative Investments
     ETFs
     Outside Strategists
     Advisor Managed Portfolios
Envestnet At-A-Glance

         A Broad Range of Fee-Based Investment Solutions

           Mutual             Multi         Separately       Advisor as
           Fund             Manager          Managed          Portfolio
          Advisory          Account         Accounts          Manager
                             (MMA)            (SMA)

              Accessible via a SINGLE web-based platform that delivers:

                             Unified Proposal Generation
                                   Portfolio Analytics
  ENVESTNET                Flexible Performance Reporting
                              Back-Office Administration
Investment Services

 Fiduciary Management & Research
 SIGMA Investment Solutions
 Investment Process
Fiduciary Management & Research
A division of Investment Services by Envestnet, the Fiduciary Management and
Research team (FM&R) offers access to some of the world’s premier asset managers,
provides thorough and rigorous research on managers, markets and topical issues and
develops creative portfolio solutions tailored to the unique circumstances of the advisor’s

  Discretionary Strategies:
  • SIGMA Mutual Fund Solution™
  • SIGMA Multi-Manager Account™
  • SIGMA Alternative Solutions™
                                                              Solutions that
                                                                Meet Your
  Fiduciary Services:
                                                              Clients’ Needs
  • Access to Non-Discretionary
  • Portfolio Consulting
  • Due Diligence
SIGMA Fiduciary
Discretionary strategies offered through Fiduciary Management & Research
(FM&R) by Envestnet.

  SIGMA Mutual Fund Solution™
   Actively managed models comprised of carefully
   selected mutual funds.

  SIGMA Multi-Manager Account ™
   Actively managed models that combine two or
   more globally prominent asset managers into a
   single portfolio that deliver the benefits of a
   traditional separately managed account for as
   little as $250,000.

  SIGMA Alternative Solution ™
   A fully-discretionary portfolio of diversified mutual
   funds that are designed to perform independently
   of stocks and bonds as a separate and distinct
   asset class.
        A Range of Investment Solutions
        Suitable For Any Investor       Managed Account Solution
                                                                         with Alternative Investments
                                                                                   $2MM +

                                                                   Managed Account Solution
                                                                   $1MM - $2MM

                                     Managed Account Solution with Mutual Funds
                                     $500K - $1MM

                     SIGMA Multi-Manager Account™
                     $250K - $750K

      SIGMA Mutual Fund Solution™ / Alternative Solutions™
      $50K - $250K

      Advisor Managed Portfolios (Rep as Portfolio Manager)
      $50K - $1 Million

50K                              500K                            1MM                           10MM
                                                    FM&R Investment Process
                                                          Enabling Advisors to Deliver the Investment Consulting Process to Clients
Used with Managed Accounts, Mutual Funds, Multi-Manager

                                                           STEP STEP
                                                                          Step 1: Identify goals and objectives
                                                            STEP STEP             Online capability to profile investors to best identify the appropriate investment
                                                              4    3              solution

                                                                   STEP   Step 2: Determine asset allocation policy
                                                              1      2
Accounts, and Alternative Investments.

                                                            STEP STEP
                                                                                  Asset allocation committee establishes strategic allocations. Committee is
                                                              4    3              comprised of leadership of investment management team

                                                            STEP STEP
                                                              1    2
                                                                          Step 3: Recommend investment managers and implement strategy
                                                            STEP                  Approved investment solutions are recommended incorporating risk profile of
                                                                     3            client with consideration to the correlations between the managers

                                                            STEP STEP     Step 4: Continuous portfolio and manager monitoring
                                                              1    2
                                                                                  Active rebalancing is one of the featured services for the Mutual Fund Solution.
                                                           STEP STEP              Advisor directed rebalancing is offered on the Managed Account solution
              FM&R Asset Allocation
              Strategies that span the efficient frontier
                                                                                                                            Identifying the client’s optimal allocation
                                                                                                                     Expected Return

                                                                                                                                                                                                                                                                 US Small Cap Equity

Expected Return (%)                                                                                                  9.2                                                                                                              US Mid Cap Equity
                                                                                                                                                                                    Model # 4 Portfolio                                                         International Equity
 12.0                                                                                                                8.6
                                                                                                                                                                                    Expected Return = 7.70%
                                                                                                                                                                                    Expected Standard Deviation: 9.77%
                                                                                    Russell 2000 TR                  8.3                                          High Yield Bond
                                                                                                                                                                                                                                    US Large Cap Equity
 11.5                                                                                                                8.0
                                                                                                                                   Optimized Portfolio
                                                                                                                     7.7           Expected Return = 7.61%
                                                                                                                                                                                                                          Current Portfolio
 11.0                                                                                                                7.4
                                                                                                                                   Expected Standard Deviation: 9.60%
                                                                                                                                                                                                                          Expected Return = 8.15%

                                                                                                      MSCI EAFE      7.1
                                                                                                                                                                                     Model # 2 Portfolio
                                                                                                                                                                                                                          Expected Standard Deviation: 12.14%

 10.5                                                                                                                6.8                                                             Expected Return = 6.80%
                                                                                                                                                                                     Expected Standard Deviation: 6.42%
 10.0                                                              Global Core 7                                     5.9
  9.5                                                       Global Core 6                                            5.3                 Investment Grade Bonds

                                                   Global Core 5                      Russell 1000 TR                       0.0   1.0   2.0     3.0    4.0     5.0      6.0   7.0      8.0    9.0    10.0 11.0 12.0 13.0 14.0 15.0 16.0 17.0 18.0 19.0
  9.0                                                                                                                                                                               Expected Standard Deviation (Risk)

                                            Global Core 4
                               Global Core 3

  7.5                 Global Core 2
               Global Core 1                                                                                                Automated
                                  LB Gvt/Credit TR                                                                          Proposal
  5.5                                                                                                                       Generator to
  5.0                                                                                                                       help present
        0.0     2.0      4.0          6.0        8.0        10.0    12.0     14.0      16.0           19.0                  overall Asset
                                              Expected Standard Deviation (%)                                               Allocation
                                                                                                                            strategy to
Research Process At-A-Glance

       Manager Universe      5,000 portfolios on database; 15,000 mutual funds

                             Initial quantitative, qualitative assessments; manager contact
   1     Identification      Qualify manager

                             Three types of analysis:
   2       Analysis               1) Quantitative - Performance, tax-efficiency, risk profile
                                  2) Fundamental - Style adherence, investment process
                                  3) Qualitative - Annual on-site visit, organizational review

                             On-site visit
   3      Monitoring
                             Comprehensive quarterly review
                             Intra-quarter conference calls

                             150+ managers
           Platform          250 portfolios
Benefits of FM&R Manager Selection
Identifying, hiring and monitoring premier asset managers who are entirely
focused in specific areas of the market helps advisors offer confident advice and
deliver consistent performance.

  Large Cap   Large Cap   Large Cap
    Value       Core       Growth         Growth                                     Negotiate
                                                       Sophisticated     Onsite      Reduced
                                        Concentrated     Screening         Due       Minimums
                                          Growth           Tools        Diligence       and
  Mid Cap     Mid Cap      Mid Cap                                                     Fees
   Value       Core        Growth        Aggressive
                                                        Thorough        Links For     Ongoing
                                          Efficient                     Execution
                                          Growth         Analysis                    Monitoring
  Small Cap   Small Cap   Small Cap                                        And
   Value        Core       Growth                                       Reporting
A Well-Rounded Platform
                                                              Large Cap Growth
 Strivefor diversification within style
 Populate platform with managers              Conservative                  Aggressive
  having complementary approaches,                                                        Mega-
                                                  Goldman Sachs                           Cap
  processes                                 Congress
    LCV              LCC             LCG

    MCV             MCC              MCG                                                  Large-
                                                                                          Mid Cap

                                              Understand differences between managers
                                              Employ most appropriate manager for
    SCV             SCC              SCG       client’s unique situation
Envestnet Investment

 Proposal Generation
 Custom Model Creation
    9-Step Online Proposal Generator

THE RESULT: A personalized, professional proposal document to share with your
       The Investment Proposal
       A comprehensive, client-friendly proposal document that includes:

I.      Client’s financial summary
           - client information
           - risk assessment
           - amount to be invested
II.     Proposed investment strategy
           - proposed portfolio
           - products and allocation
           - assessment of suitability
           - hypothetical growth of investment
III.    Product Profiles
           - description
           - performance summary
           - composition of the recommended investments
IV.     Appendix
           - optional documents that describe
           various aspects of investment markets, etc.

Online Access
 Research
 Reporting Capabilities
Envestnet Benefits

 Advisor Benefits
 Investor Benefits
 Contact Info
The Advisor Advantage

                    Streamline your business with one
                     single investment platform

                    Add value and pay closer attention
                     to important client relationships

                    Leverage a team of experienced
                     professionals to guide you through
                     every stage of the client
The Investor Advantage

 An investment process built
  around the investor’s unique

 Access to some of the world’s
  leading investment managers,
  many of whom were once available
  exclusively to large institutional

 Ongoing portfolio review

 Comprehensive portfolio reporting
The Advisory Services Team
                                                                                                                                                  Web Site:
                                                                            WI                                           ME             
                                                      SD                                                         VT
             OR             ID                                                                                     NH
                                        WY                                             MI                    NY    MA
                                                                  IA                                             CT
                                                                             IL             OH
                                                                                                        PA          RI                            Client Services:
                       NV                                                         IN                            NJ
                                 UT         CO
                                                           KS         MO                KY       WV
                                                            OK                    TN                   NC
                                  AZ        NM
                                                                            MS    AL
                                                                                                  SC                                              Email:

Western Region                                   Northwestern Region                                          Midwest Region                         Northeast Region

   Phil Nicolaou                                     James Lumberg                                                 Mark Gerard                            William “Kip” Weese
   VP, Regional Director                             Co-Founder & National Sales Manager                           VP, Regional Director                  VP, Regional Director
   Ph: 925.253.1088                                  Ph: 312-827-2810                                              Ph: 414.962.1085                       Ph: 978.462.6646                                          

   Bryan Watson                                      Patrick Forde                                                 Josh Glazer                             Courtney Bayha
   Regional Consultant                               Regional Consultant                                           Regional Consultant                     Regional Consultant
   Ph: 303.824.8151                                  Ph: 303.824.8165                                              Ph: 312.827.2824                        Ph: 212.642.7420                                            

             Mid-Atlantic Region                                             Southeast Region                                           South Central Region

                       Tim Hanson                                                 Ron Lively                                               Ty Sanders
                       VP, Regional Director                                      VP, Regional Director                                    VP, Regional Director
                       Ph: 212.642.7422                                           Ph: 813.758.1449                                         Ph: 512.842.1589

                       Aaron Bauer                                                Phillip Schoenecke                                       John DeHart
                       Regional Consultant                                        Regional Consultant                                      Regional Consultant
                       Ph: 312.827.3961                                           Ph: 312.827.7036                                         Ph: 303.824.8215
A Customized Approach to Investment Planning
Topics for Discussion

 I.     Overview of the Managed Account Solution

 II.    The Managed Account Marketplace

 III.   Is the Managed Account Solution Right for You?
I.   Overview of the Managed Account Solution
  The Managed Account Solution

  Program Highlights

• Professional asset management from more than 100 institutional asset managers
  representing over 200 investment disciplines that are typically only available to large

• Four-step investment process that will help identify your goals and objectives and
  apply the most suitable investment strategy to meet them

• Ongoing due diligence of the managers in your portfolio to ensure consistency

• Comprehensive portfolio reporting

• With a fee-based relationship, you and your advisor share a common goal – to grow
  the assets in the portfolio (as the assets increase, everybody wins!)
Managed Accounts 101:
Separately Managed Accounts vs. Mutual Funds

   Separately Managed Accounts                 Mutual Funds
   • You own shares in individual securities   • You own fund shares, not individual securities
   • You have no embedded gains                • You’re vulnerable to embedded gains
   • You can time capital gains or losses      • You have no control over capital gains or
   • You can avoid or include certain            losses
     investments                               • You have no influence over the fund portfolio
   • You always know which investments         • You learn twice a year what investments the
     are in your account                         fund owns

         Investor =                                Advisor =                        Investment Manager =
         Team Owner                                  Coach                                 Player(s)

• Investor accumulates wealth to      • Hired to help “owner” identify          • Excel at respective positions
“buy the team”                        goals                                     • Focused style of “play” (manager
• Goals need to be articulated in     • Recruits the right “players” (asset     skills are unique to discipline)
order to “win” (retirement,           allocation & manager selection)           • The right combination of “players”
children’s education, etc.)           • Ensures that “players” adhere to        leads to improved performance
• Has neither time nor expertise to   their positions (due diligence            (diversification)
be his own “coach”                    guarantees consistency)                   • Each “player” contributes to a
                                      • Provides feedback on how                particular position (specific style with
                                      “players” are doing (performance          no style drift)
                                      • Replaces players if not fulfilling
                                      role (manager termination if necessary)
The Managed Account Investment Process

Designed to meet the highly disciplined approach that institutional money managers have
used to oversee large endowment and pension funds for decades

Beginning with a detailed outline of your current
financial situation, and a thorough understanding of
your goals, we construct a blueprint of the investment
strategy and define an asset allocation plan.        We
implement the plan by selecting and orchestrating
portfolio components managed by selected premier
asset managers who specialize in specific asset
classes and styles. The result is an individual portfolio
created to achieve your investment objectives.
Understanding Your Goals and Objectives

                           Perform detailed analysis of current portfolio

                           Ascertain a complete understanding of objectives and investment horizon
               Step One
                           Determine return objectives
Identify Your Needs and
                           Develop understanding of tax status

                           Analyze investment attitude and aversion to risk

                                                                             Our in-depth risk tolerance
                                                                             questionnaire helps assess
                                                                             your investment
                                                                             objectives, time horizon,
                                                                             income needs and
                                                                             tolerance for risk.
Determine Asset Allocation Strategy

                             After identifying your investment objectives and
                             time horizon, level of return needed to achieve
                  Step Two   your goals and risk tolerance, we will assign your
Determine Asset Allocation
        Strategy             portfolio   to   a   reference    asset   allocation.   This
                             reference allocation takes into consideration two asset
                             classes, equity and fixed income, and appropriates the
                             level of each in the portfolio.
The Benefits of Asset Allocation
Changing Leadership

No one can accurately and consistently predict when shifts in market leadership will occur or how long they will last. The
chart above tracks the performance of several asset classes over a ten-year period. As you can see, the market leaders
of one year often become the laggards the next. It is important to spread your assets across classes to benefit from
quick upswings and receive protection in downturns.
Courtesy of Nuveen Investments. Sources: Standard and Poors, Bloomberg Financial Markets, Frank Russell Company. Performance of all cited indices is calculated on a total return
basis and includes dividend reinvestment but does not reflect investment advisor or other fees that would reduce performance in an actual client account. Indices are not available for
direct investment. Past performance is not indicative of future results. It is important to remember that there are risks inherent in any investment and there is no assurance that any asset
class or index will provide positive performance over time.
Recommend Managers and Implement Strategy

                             Once we target the appropriate reference portfolio, we
                Step Three
                             develop a multi-asset class portfolio using selected
 Recommend Managers and
    Implement Strategy       premier asset managers. Your portfolio is constructed
                             to optimize the potential for greater returns while
                             maintaining the level of risk accepted by the two asset
                             class portfolio.
Portfolio and Manager Monitoring

                              Investment plans will shift and move naturally as the
                              market moves.

                                 Rebalancing to ensure portfolio continues to adhere to asset
                  Step Four       allocation plan and targets your objectives
   Portfolio and Manager
         Monitoring              Rigorous analysis of asset managers to ensure consistency
                                  and relevance. Ongoing due diligence of manager provides
                                  consistency and assurance
How Do We Select Asset Managers?

Continuous due diligence process ensures the quality of managers selected for your portfolio

              Institutional money managers            Asset
              selected for the program              Managers

         Onsite due diligence meetings are             Analysis
         conducted                                 On-site due diligence
                                                    meetings. Investment
                                                  discussion and approval

    Performance and risk attribution           Fundamental Analysis
    analysis narrows the list further        A thorough analysis of performance
                                               and risk attribution is performed

                                                Screened Managers
                                             An initial screen is conducted for:
Certain managers make the                            • Style consistency
cut and others don’t                                    • Rate of return
                                                      • Information ratio
                                                        • Downside risk

Over 5,000 managers
screened                                Universe of Asset Managers
Comprehensive Portfolio Reporting

• Quarterly account statements provide you with a detailed snapshot of how your portfolio
  is performing and how well you are meeting your investment objectives

                                                                                        Your statement provides both an aggregate
                                                                                        view of the total assets in your account as
                                                                                        well detail on how each asset manager in
                                                                                        your portfolio is performing.

Reviewing quarterly statements with your financial advisor is important to help you evaluate your entire portfolio. Since the
last time your allocations were made, your life may have changed in ways that affect your investment goals, or developments in
the financial markets may have changed your attitude towards risk.
Benefits of the Managed Account Solution

• You own shares in individual securities, allowing for better customization of your

• You do not incur unrealized gains as the cost basis of each security is established at
  the time of purchase

• You can choose to restrict or include certain investments

• You can better manage for taxes by instructing the manager to take gains or losses as

 You have access to some of the world’s leading investment managers, many of
  whom were once available exclusively to large institutional investors

• You’ll know exactly what you own in your portfolio and how your investments are
  performing with our comprehensive portfolio reporting capabilities
II.   The Managed Account Marketplace
The Evolution of Managed Accounts
Benefits Have Increased While Price Has Decreased

Acct. min.: $5 million+
Access: Wealthy investors go directly to asset managers              Acct. min.: $50,000 - 100,000
Acct Info: Investors receive quarterly statements via mail           Access: Through brokers and financial advisors (RIAs)
from manager                                                         Acct Info: Ongoing access for investors and advisors
                                                                     through online platforms

     Prior to                                   Early                                             Today
      1990                                     1990’s

                                        Acct. min.: $100,000+
                                        Access: Through brokers (from firms w. established
                                        institutional businesses)
                                        Acct Info: Quarterly statements pass through broker
                                        before being sent to investors
The Demand For Managed Accounts Continues to Grow as
Investors Seek Customized Investment Solutions

                                                 Cerulli Managed Account Growth Projections
                         Separate Account Consultant Programs                                  Rep-as-Portfolio Manager
                         Mutual Fund Advisory                                                  Fee-Based Brokerage
              $1,400                                                                                  $1,391
 $ billions

                                                              $055            $742
               $400          $299

                           1997      1998       1999         2000    2001    2002    2003    2004     2005E    2006E      2007E

                  Source: Cerulli Associates, January 2006
III. Is the Managed Account Solution Right for You?
Profile of a Managed Account Client

Managed accounts are ideal for investors seeking a long-term,
customized, goals-driven approach to investment planning

  You have $300,000 or more to invest

  You feel you’ll benefit from professional investment management

  You’ve recently inherited a substantial sum, sold your interest in a business, or
   won a financial settlement

  You have retirement assets you’re ready to roll over
What is Included in the Fee?

Your annual fee covers:

 Consultations with your financial advisor
 Access to some of the world’s leading institutional investment managers
 A strategic asset allocation model that reflects your goals
 Ongoing manager due diligence
 Comprehensive quarterly statements
 Tax selling at year-end for taxable accounts (as directed by your advisor)
 Portfolio management and rebalancing
 Custody services
 Commission-free transactions (thru investment managers)
Summary of Client Benefits

The Managed Account Solution offers customization, transparency and
tax efficiency

         Greater portfolio control

         Ability to manage for taxes

         Insight into the holdings of the portfolio

         Accessibility to money manager

         Confidence in investment decisions

         Goal alignment

Description: Asset Management Solutions document sample