![]() The AutoPilot Partner Store, announced at the T3 conference in February 2017 , is a model marketplace that serves as an extension of Riskalyze’s robo solution. This is a good opportunity to compare and contrast how the different firms structured their offerings. Three of these are from custodians (Folio Institutional, TD Ameritrade, TCA) and three are from technology companies (Orion, Riskalyze, HedgeCoVest). Trust Company of America Money Manager X-Change.TD Ameritrade iRebal Model Market Center. ![]() Folio Institutional Model Manager Exchange.In this article, we will cover the following offerings: But can they succeed in disrupting the market and gathering significant assets? Or will they remain niche players and remain no more than flies on the rumps of the market leaders? These marketplaces are a direct threat to existing TAMPs such as Envestnet, SEI and Loring Ward. At the same time, marketplaces offer asset managers a new distribution channel for their products that are quickly becoming commoditized. They allow financial advisors access to a broad range of third-party-created investment models while retaining control over implementing trades. Model marketplaces are a major shift in the landscape of investment management. … robo-advisors created an efficient operational solution (digital onboarding and automated trading and rebalancing tools to manage model portfolios) to what is ultimately a distribution problem (how to get your particular managed account solution into the hands of consumers?) I would recommend reading his article for a brief history of turnkey asset management platforms (TAMPs) and an explanation for how these marketplaces are unbundling what had been traditional TAMP services. My good friend and industry guru, Michael Kitces, wrote an excellent piece on the emergence of model marketplaces. These exchanges are designed for advisors to be able to browse and select from a smorgasbord of managers, ETF’s and fund providers and build their own investment models. Retail Model Exchanges are designed with advisors as the primary users. Advisors never interact with these tools since their firms have operational staff that handle these tasks. They are designed to be more like packet switching routers that move investment models from managers into the vendor platform to be distributed. We previously wrote about institutional model hubs (See 7 Model Hubs Battle for SMA Managers & Sponsors), which are B2B products that connect sponsor firms and asset managers. Whether they are called hubs, exchanges or marketplaces they have a wide variety of functionality and business models and they all share one key feature ability to transmit managers’ investment models to sponsor firms and advisors. Interested advisers can learn more about MMX by contacting Folio Institutional at 88.( Wealth Management Today) This article is the second in our series on the tools and technologies that help connect asset managers to their distribution networks. “Meanwhile, licensees can efficiently access third party expertise to offer their clients a broader range of managed investments.” “MMX allows model managers to increase the reach and visibility of their portfolio strategies, while creating a new revenue stream for them,” said Folio Institutional President Greg Vigrass, in a press release. ![]() Once a model is licensed for use, trades are executed via the Folio Institutional platform, which handles all back-office transactions between the licensor and licensee. Negotiations of licensing fees are conducted directly between the sellers and buyers of the investment strategies. Folio Institutional is initially offering the MMX program as a free service for all registered advisers and broker/dealers who use its platform.Īdvisers wishing to have their models displayed can do so for free as well however, they are required to have a minimum level of assets on the Folio Institutional platform, with those funds invested in one or more of their models. The “Model Manager Exchange” (MMX), currently features 150 portfolios from 35 financial professionals. ![]()
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