Irwin Stein

Your heavy reliance on acronyms made my head spin. How about a clue?

How an ex-DFA exec created a $1.2 billion TAMP in three years and why he's phasing out DFA funds for factor ETFs

Former DFA exec John Blood is migrating his portfolios toward 'factor' ETFs, and away from DFA mutual funds.

Symmetry Partners

Efficient Advisors

Joel Bruckenstein

Loring Ward

Alex Potts

Marion Asnes

Nicole Newlin

John Blood

A look at the numbers shows that exchange traded funds are starting to move in lockstep with RIAs and vice-versa. RIAs invested $496 billion in ETFs in the 12-month period ended June 30, 2015 – that’s a $78 billion increase compared to the same period the year before. By comparison, the wirehouse channel added 20% fewer ETF assets, or $397 billion in the last year; granted, an amount that was $70 billion greater than its aggregate investment during the same 12-month period the year before, according to Broadridge Financial Solutions. RIAs that manage portfolios and make discretionary investment choices for their clients value ETFs because they provide advisors with easy access to market segments at a cheap price – an especially important factor for RIAs who are compensated on an asset-fee basis. Fee-based advisors appreciate ETFs’ tax efficiency, liquidity and broad exposure at low cost. Conversely, RIAs are a prized channel for ETF-makers like State Street, Invesco, PowerShares, Vanguard Group and BlackRock. ETFs are also a major ingredient in portfolios devised by robo-advisors -- essentially automated RIAs -- for the mass affluent who invest more than 90% of their assets using ETFs.

ETFs

Outsourced investments are one of the fastest-growing categories in the financial advisory world. Perched between
the asset custodian and the financial advisor, these (mostly) turnkey asset management programs can handle all or a 
portion of their investing, technology and fiduciary duties.

Advocates of using these TAMPs point to how it's better for the advisor because it frees up more time to spend with clients and prospects. It's also better for clients because the duties are being handled by specialized professionals who benefit from economies of scale.

Skeptics say that it adds a layer of cost and takes away an element of control from the advisors in executing according to a client's financial plan.

TAMPs

The RIA business is many good things but integrated from a gender standpoint is not one of them. This is not so great. Women are the majority of humanity and they have an asset-building strategy that can't be beat. Women outlive their beer-and-steak mates and end up with big estates. But today's women have too another strategy -- pursuing wealth in the workplace. Yet when they go to find fellow women to talk all this through with, they don't readily find them. 

Companies big and small have for decades fallen over themselves to say that they have women's initiatives but I can't think of one that has amounted to much. But there are stories-- dozens or hundreds -- of them about women exerting their influence on this business and we are starting to collect them. It's a starting place -- documenting the ground being covered by women in the form of engaging tales graphically depicted by the physiognomy of the fairer sex.

Women of Wealth Management

After calling on DFA TAMPs like Loring Ward and Symmetry, the owner of Efficient Advisors saw an opening and a way to shave costs

How an ex-DFA exec created a $1.2 billion TAMP in three years and why he's phasing out DFA funds for factor ETFs

test ting

Dougie

Related Moves

March 13, 2024 at 1:46 AM

September 8, 2023 at 11:58 PM

December 3, 2022 at 3:16 AM

November 12, 2020 at 4:43 AM

RIABiz Directory

White Paper Postings

Special Sections

Common Tags

Recent Articles

Popular Writers

RIABiz

Directory

Archives

Connect